AG, Muthaura summoned over railway deal extension

• AG Amos Wako, Head of Civil Service Francis Muthaura, Transport PS Cyrus Njiru and his Finance colleague Joseph Kinyua expected to appear before the PIC

Parliament’s Public Investment Committee has summoned top government officials to explain their reasons for extending the Rift Valley Railways (RVR) railway concession, despite the committee’s recommendation that the concession be terminated “immediately.”

Attorney General Amos Wako, Head of Civil Service Francis Muthaura, Transport permanent secretary Cyrus Njiru and his Finance colleague Joseph Kinyua are expected to appear before the PIC “as soon as possible” to explain why they saw it fit to flout Parliament’s order.

PIC chair Mithika Linturi and members Luka Kigen and John Mbadi said the four have to explain why they saw it fit to extend the contract despite overwhelming evidence that the concessionaire had flopped in service provision and “was clearly not abiding by the concession agreement”.

The chair added that the PIC had realised that most of the recommendations in the PIC report were likely to be flouted and that was why they wanted the bigshots in government to shed light on the issue.

“We want to know the status of the concession as at now and why they thought the extension was valid,” said Mr Linturi. “We feel that the manner in which this matter is being handled is not going to serve public interest.”

This comes against a backdrop of firefighting between the Kenya and Uganda governments to save the concession, while RVR is itself locked in boardroom wrangles with some of the key shareholders –Transcentury (Kenya) and Citadel (Egypt). Already, all the shareholders have raised Sh63 billion to save the concession after a team comprising Kenyan and Ugandan officials moved to terminate the contract.

The joint team has already met and said that it was reviewing various proposals aimed at reviving the beleaguered 25-year concession of the Kenya-Uganda Railway.

He added that the concessionaire did not meet his part of the contract “for the money which came in was very negligible compared to what was agreed by the government of Kenya and Uganda.”

Transport Minister Chirau Ali Mwakwere was also on the PIC’s crosshairs for acceding to “indulge the concessionaire” when a termination notice had already been issued.

Mr Mbadi added: “If the minister was to give any extension, he has to make sure that he had the advice of experts, the Kenya Railways. He appears not to have done so, therefore his was a political decision rather than a prudent economic one.”

Mr Linturi also revealed that Mr Kinyua had written to the PIC complaining over the adverse mentions in the committee’s last report. A copy of the letter is also with the Speaker of National Assembly, Mr Kenneth Marende.

In its 16th report on the status of State Corporations, the PIC recommended that Mr Kinyua, Mr Mwakwere, the then Finance Minister Amos Kimunya and Investment Secretary Esther Koimett be investigated for the role they played in the concession agreement.

This recommendation was approved by Parliament, thus making the managing director of Kenya Railways Corporation, Mr Nduva Muli, to issue a termination notice to Rift Valley Railways.

However, RVR moved to court and the termination which was due for August 10, 2009, was put on hold.

“Before even the stay had been argued out, the minister of Transport decided to give indulgence to the concessionaire…extended time for them to fulfil the obligations of the contract, further compromising the matter,” said Mr Linturi.

The PIC is waiting for the Treasury Memorandum –a brief from the Ministry of Finance showing the various stages of action on the recommendation of the PIC’s report. But Mr Linturi was apprehensive that the protest letter to the Speaker and the PIC from Mr Kinyua, was likely to jeopardize the implementation of the report.

“We suspect that he might slow the implementation of the report and in particular with regard to RVR… we want him to give us a status of the report regardless of whether he is the one mentioned or not,” he said.