Update: Public Outrage Grows as Petition Seeks Investigation into China’s Sh777B Overpayment in SGR Roads and Bridges


The Senate has received a petition requesting an investigation into the overpayment of Sh777 billion to China Roads and Bridges, the company responsible for supplying facilities and rolling stocks for the construction of the Standard Gauge Railway (SGR) by the State Department for Transport.

This even as the State department is said to have allocated Sh97.3 billion for the construction of the Mombasa – Nairobi SGR seven years after the completion of the project.

A petitioner, Bernard Muchere in his documents tabled before the Senate wants the lawmakers to also establish the authenticity of the amount spent to develop SGR, which he claims was aggregated to Sh1.18 trillion notwithstanding that the contract sum was Sh407billion.

“The amount spent to develop SGR aggregated to Sh1.18 trillion notwithstanding that the contract sum was Sh407 billion indicating that China Roads and Bridges and the suppliers of facilities and rolling stocks were overpaid by Sh777billion,” reads part of the petition.

According to Muchere, the SGR project was schemed by China Road and Bridges Corporation which benefitted the Chinese at the expense of Kenyans.

Establish authenticity

He further wants the Senators to establish the authenticity of Sh63.9billion expenditure by the National Treasury for the development of Nairobi-Naivasha SGR, whereas work on that part of SGR was completed and commissioned in December 2019.

“The petitioner prays that the Senate intervenes in this matter with a view to undertake an inquiry into the inconsistency in financing the SGR project between the National Treasury, State Department of Transport and Kenya Railways Corporation,” reads part of the petition.

Muchere who is a Fraud Risk Management Consultant further alleges that the SGR project did not meet the criteria for a public project neither did the contract and related debt qualify as a public contract and public debt.

Muchere avers that the National Treasury debt register shows three loans 2024006, 2014008 and 2015023 aggregating to Sh466.41billion ($5.08billion) from Exim Bank of China.

Aggregate receipt

In addition, KRC in its financial statements shows aggregate receipt of Sh539.27billion loans as of June 30, 2020 from the Exim Bank of China and the State Department of Transport in its Appropriation Act (Budgets) upto the June 30, 2021 financial year shows Appropriation in Aid (AIA) aggregating to Sh387.9billion from the government of China.

Muchere in his petition argues that there is inconsistency in loans relating to the SGR as reflected in the books of the National Treasury, State Department of Transport and Kenya Railways Corporation (KRC) in terms of the lender and the amount.

Muchere in his petition argues that the development appropriation Acts (budgets) for 2015/2016 to 2020/2021, the aggregate expenditure estimates relating to SGR from Mombasa to Naivasha were Sh604.3billion comprising direct payments (AIA loans) of Sh436.9billion and Sh159.9billion receipts not classified and Sh7.5billion exchequer issues.

The petitioner also contends that there appears to be two types of loans, one from Exim Bank of China aggregating to Sh544.2billion ($5.08billion) and the other Sh387.9billion from the Government of China, asking the lawmakers to seek clarification on which lender betweent the Exim Bank of China and the Government of China extended SGR credit facilities.

“The alleged loan of $5.08billion from the Exim Bank of China to fund the SGR project was not paid into the Consolidated Fund contrary to Article 206 (1) of the Constitution, instead ‘Forms of irrevocable  notice of drawdowns’ substituted for payment of loan into the consolidated fund,” the petition reads in part.

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