Yesterday, the court of appeal ruled on a case filed in 2014 that wanted to stop the construction of the Standard Gauge Railways (SGR).
The Court ruled that the Kenya Railways Corporation (KRC) failed to comply with Procurement and Disposal Act of 2005.
“We substitute therefore an order declaring that Kenya Railways Corporation, as the procuring entity, failed to comply with, and violated provisions of Article 227 (1) of the Constitution and Sections 6 (1) and 29, of the Public Procurement and Disposal Act, 59 2005 in the procurement of the SGR project. The appeals succeed to that extent only,” the ruling before justices Martha Koome, Gatembu Kairu and Jamila Mohamed 2005 reads.
This set aside the part of the judgment of the High Court that held that the procurement of the SGR was exempt from the provisions of a section of the Public Procurement and Disposal Act.
Where it all started
On November 21, 2014, the High Court declined to stop the construction of the SGR.
Justice Lenaola ruled that documents tendered by the appellants as evidence in support of the petitions were inadmissible having been obtained illegally.
However, the appellants in the case–Okiya Omtatah and Wycliffe Gisebe Nyakina–had argued that there was no due diligence or independent feasibility conducted and that the design of the project was undertaken before seeking contractors to implement it.
In early may 2020, kenyanbusinessfeed.com shared an article written by Minxin Pei, a professor of government at Claremont McKenna College and a nonresident senior fellow of the German Marshall Fund of the United States.
In it, he argued that the African states that China has advanced loans might refuse to pay back the money and that ‘there’s nothing China could do’.
After the Court of Appeal ruling, the President of the Law Society of Kenya, Nelson Havi, whose predecessors had co-joined activists Omtatah and Gisebe in pushing for the suspension of the SGR project criticised the ruling stating that the Kenyan government might be ‘preparing to plead illegality so as not to pay back the money’.
“Something doesn’t add up in Court of Appeal’s decision declaring completed SGR project unconstitutional and unlawful. It may be a preparatory process for GoK to plead illegality at an international arbitration should China Road and Bridge Corporation sue for breach of contract”. – wrote @NelsonHavi, at 12:43 AM · Jun 20, 2020 on Twitter.
Kenya is heavily indebted to China to the tune of nearly Sh500 billion in the SGR construction alone.
In arguing that African countries might not pay back Chinese debts, Prof Pei was pegging his opinion on the disruption caused by the COVID-19 pandemic and in the oil sector.
He wrote, If supply disruption occurs because of conflict in Africa or along China’s long sea lines of communication, the theoretical advantage of direct control will be worthless because China, at least for the foreseeable future, lacks the military capabilities to protect its mines and railways in Africa or escort its merchant ships on a sustainable basis. China’s gamble in Africa also flopped thanks to bad timing. Its foray into the continent coincided with the peak of the most recent commodity supercycle, skyrocketing prices of raw materials, this time driven by Chinese demand. As a result, Chinese companies paid top price for assets that most probably have lost huge value after the collapse in commodity prices”.
Then added, “Now that the coronavirus outbreak is about to devastate Africa’s fragile economies and societies, China needs a pragmatic exit strategy. Beijing must realize that it is unlikely to recover most of its sunken investments or loans because of the economic impact of the virus on Africa”
Read the whole article below:
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