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{
"id": 1408586,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1408586/?format=api",
"text_counter": 34,
"type": "speech",
"speaker_name": "Sen. Okiya Omtatah",
"speaker_title": "",
"speaker": null,
"content": "Contract as provided under Section 46 of the Public Procurement and Asset Disposal Act of 2015. (d) THAT, the EPC/Turnkey Commercial Contract purported to China Road and Bridge Corporation (CRBC) did not meet the criteria for a Kenya public contract, therefore the preferential buyer credit entered between the KRC and CRBC to finance the supply and installation of facilities, locomotives and rolling stock for the Mombasa- Nairobi SGR in July and October, 2012 for a total contract sum of USD3,894,192,784.72 was a private contract, hence the loan cannot be termed as public debt. (e) THAT, the Government of Kenya signed as a State borrower for the preferential buyer credit to an agreement, contrary to Sections 47(1) and 51(1) and (2) of the PFM Act, 2012, which provides that loans maybe raised on behalf of the national Government entities which are organs under the Government of Kenya (GoK). (f) THAT, the only written preferential buyer credit loan agreement published was loan No.2014006 of US$1,600,000,000 dated 11th March, 2014. The loan agreements for these two other loans No.2014008 and No.2015023 of US$2,000,584,028.87 and US$1,482,775,029.43 dated 11th May, 2014 and 3rd December, 2015, respectively were not published. (g) THAT, Section 55(1) of the PFM Act, 2012, and Section 25 of the Kenya Railways Corporation Act, Cap.387 empowers the KRC as a national Government entity to borrow independently. However, the Kenya Revenue Authority (KRA) statement of financial position as of 30th June, 2015 (2014/2015) financial statement recorded accumulated losses of Kshs18,514,313,370, and therefore was not credit worthy to have been granted any loan. (h) THAT, the alleged loan of USD5,086,329,058 from the Exim Bank of China to fund the Standard Gauge Railway (SGR) was not paid into the Consolidated Fund contrary to Article 206(1) of the Constitution 2010. Instead, forms of irrevocable notice of drawdowns substituted for payment of loan into the Consolidated Fund. (i) THAT, the credit facility of USD5,086,329,058 extended by the Bank of China in USD1,282,136,273 above the contract sum of USD3,804,192,785. According to Articles 2 (4) (5) of the Preferential Buyer Credit Loan Agreement, all proceeds from the credit facility will be paid to the contractor and suppliers of the SGR project in China and goods, technologies and services shall be purchased from China using the credit facility proceeds. This means, the excessive loan will not be injected into the Kenyan economy as it will be retained and help the Chinese economic growth which appears to be the incentives for granting excessive loans. (j) THAT, the SGR grants from the Government of Kenya aggregated to Kshs644,796,686,819 while the SGR Escrow Grants aggregated to Kshs50,838,624,096 for the 2014/2015 to 2019/2010 financial years. With this, an addition of Kshs644,796,686,819, Government of Kenya grants which makes the total tax payers’ money spent on the SGR project is approximately Kshs695,635,310,915 with over expenditure of Kshs237,748,058,854 from the contract sum of Kshs--- The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
}