The Court of Appeal has ruled that the SGR contract is illegal, following Kenya Railways’ (KR) failure to follow the set procurement laws. The Court ruled out that the procurement process did not follow proper procedures in awarding the SGR contract. Further, the Court found fault in the feasibility study of the project by China Road and Bridge Corporation (CRBC).
The defense team argued that the financing agreement dictated the tender award to CRBC. However, the Court nullified the argument, noting that Kenya Railways awarded the tender before the financing agreement. According to the Court, the procurement process informed the terms of financing, therefore violating the Procurement Act.
“We conclude, therefore, that the engagement of CRBC was not an obligation arising from the “negotiated grant or loan” agreement for the purposes of Section 6 of the Act,” read the Court ruling.
The Court further claimed that the conflict of interest in carrying out the feasibility study exacerbated the situation. CRBC undertook the feasibility study for the SGR, “spelling out the manner in which it should execute the project.”
Earlier, the Law Society of Kenya questioned the single-sourcing practiced in tendering for the SGR.
Nevertheless, the Court upheld that environmental considerations for the projects held merit.