Sh8.5 bn coal mining project in danger
Posted Saturday, July 21 2012 at 23:30
Ngilu group vows to reject Kitui project as LSK chairman seeks to block deal in court
The future of a planned coal mining project worth more than Sh8.5 billion in Kitui County hangs in the balance following opposition by local leaders and a court suit.
The leaders, including two Cabinet ministers who talked to the Sunday Nation, want the Mui Basin coal mining project stopped over allegations of impropriety and corruption.
The Sunday Nation also established that Law Society of Kenya chairman, Mr Eric Mutua is planning to go to court this week to block the signing of an investment agreement between the government and a Chinese investor awarded the concession by the Ministry of Energy last November.
Emerging details, they said, suggest that Fenxi Industry Mining Group could have been a “proxy”.
They said credible information they have obtained shows that the said Chinese company, Fenxi Industry Mining Group, did not exist in China or in Kenya.
“The company is a briefcase one being pushed by a clique of powerful individuals in politics and business circles angling for the deal at the expense of the project and the people of Kitui County,” said Water minister Charity Ngilu in an interview on Friday.
Mrs Ngilu said she has written to Energy minister Kiraitu Murungi to warn him about the company.
She vowed that the project will not take off if the ministry did not come clean on the entire tender awarding process and produce documents to prove that Fenxi Industry Mining Group was a legal entity.
The controversy surrounding the Chinese company first arose two months when Mutito MP Kiema Kilonzo stated that Fenxi did not exist shortly after returning from a visit to China. Mr Kilonzo had led a delegation of 13 people, including government officials, to China in May.
Mr Kiema said representatives of the company had tried to hoodwink them by taking them on tours of mining sites operated by other firms and introduced another real estate company called Jingu Group as its partner in the Kenyan deal.
“This Jingu Group did not feature anywhere during the tendering process and while in China we leant that it did not have any coal mining experience or relations,” Mr Kilonzo said when interviewed.
The Mutito MP claimed Energy ministry officials had not carried out any due diligence on the company.
“There is more than meets the eye here, and we will stop at nothing to expose those behind this attempt to rip off the country,” he said.
Mr Mutua said he decided to go to court after Energy permanent secretary Mr Patrick Wanyoike failed to respond to his July letter in which he demanded that the ministry release official information on Fenxi.