alexa MPs to start probe into ominous SGR deal with China - Daily Nation

MPs to start probe into ominous SGR deal with China

Friday February 15 2019


A train runs on the standard gauge railway in Mombasa. The bombshell that SGR will not immediately go past Naivasha to Kisumu has hit hard a number of speculators who had bought property worth billions of shillings. PHOTO | FILE | NATION MEDIA GROUP 

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Parliament will next week launch investigations to unearth the circumstances under which the port of Mombasa was used as collateral for a loan the government secured from China’s Exim Bank to construct the standard gauge railway (SGR).

The National Assembly’s Public Investments Committee will on Tuesday meet with the Kenya Ports Authority (KPA) management to get details of the loan.

Committee chairman Abdullswamad Nassir on Thursday said the committee will get to the bottom of the matter to ensure that the public facility is safe.

“We want to know how the agreement was signed and on what basis and how much has already been paid,” Mr Nassir said at a press conference in Parliament Buildings.

“We want to assure Kenyans that we are on top of this matter,” the Mvita MP added.



A management letter by Auditor-General Edward Ouko states that Exim Bank would become a principal owner of the port if Kenya Railways Corporation (KRC) defaults in repaying Sh227 billion borrowed to build the SGR.

A report by the Auditor-General states that the payment agreement substantively means KPA’s revenue would be used to clear the debt.

Mr Nassir, accompanied by committee members Babu Owino (Embakasi East), Justus Kizito (Shinyalu) and Paul Katana (Kaloleni), said the committee will not allow the country’s assets to be owned by the Chinese as in the case of Zambia and Sri Lanka.

The committee also has written to the secretary of investments to disclose the total amount the government has pumped into all State corporations.


Mr Nassir said the committee wants to know whether taxpayers’ money used to bail out State corporations was being utilised properly and for the intended purpose.

“On many occasions the government comes to the rescue to some corporation by injecting billions of taxpayers’ money, but we don’t see anything viable that comes out of the corporations,” Mr Nassir said.

The committee also opposed the impending takeover of Jomo Kenyatta International Airport (JKIA) by Kenya Airways before due diligence is done.

The MPs said thousands of jobs would be at risk if the plan is approved.

“We want to know who the owners of KQ are and what is in this deal. The airport is the face of Kenya and we do not want to wake up and find we do not own the facility.

“At face value, this is a bad deal and we want to know why this deal is so important,” Mr Nassir added.

KQ’s plan, contained in its Privately Initiated Investment Proposal (PIIP), which received Cabinet approval in June last year, includes the creation of a special purpose vehicle (SPV) — a unit of a company which is shielded from the parent firm’s financial risk — to operate, maintain and develop JKIA.