Supreme Court Voids Ksh500 Billion SGR Verdict, Delivering Relief to Uhuru
Friday, June 16th, the Supreme Court overturned the Court of Appeal’s ruling that procurement laws were violated in the Ksh500 billion Standard Gauge Railway (SGR) agreement between Kenya and China.
The five-judge panel consisting of the Deputy Chief Justice, Philomena Mwilu, and justices Mohamed Ibrahim, Smokin Wanjala, Njoki Ndung’u, and William Ouko ruled that the Standard Gauge Railway project’s procurement process complied with Article 227 of the Constitution.
In their decision, the judges also noted that the procurement was a government-to-government transaction exempt from the Public Procurement Disposal Act of 2005.
“Additionally, the SGR project was questioned by two parliamentary committees, but none of the respondents chose to participate. The projects were approved by the aforementioned, public legislative process. By our constitution, the people can exercise their oversight authority through their elected representatives residing in Parliament. Whether a citizen approves of or is pleased with the actions taken is a matter of conjecture, assuming the prescribed procedure was followed.
DCJ Mwilu’s ruling stated, “In the circumstances, we respectfully disagree with the appellate court and hold that the procurement process for the SGR project met the requirements of Article 227 of the Constitution when read in conjunction with the provisions of the PPDA, 2005.”
The late President Mwai Kibaki initiated the SGR deal with contracts approved by the administration of former President Uhuru Kenyatta.
Okiya Omtatah, a senator and activist from Busia, filed a petition with the High Court challenging the SGR procurement process and the contracts awarded to the China Road and Bridge Corporation (CRBC).
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The Kenyan Law Society also petitioned the High Court to prohibit CRBC from constructing SGR. The petitions filed in February and May of 2014 alleged that the government did not conduct adequate due diligence.
Before selecting a contractor and delegating the project to CRBC, the administration of Uhuru was criticized for failing to conduct an independent feasibility study and evaluate the project’s design.
Considering the reported blacklisting of the company by the World Bank in January 2009, this was of particular concern.
Single sourcing or direct procurement for a megaproject such as the SGR was illegal, according to the activists.
They argued that the government should have issued a restricted invitation to other Chinese firms with the necessary qualifications to bid on the contract.
In November 2014, the High Court, in a decision issued by Justice Isaac Lenaola (now a Supreme Court judge), dismissed the consolidated petitions on technical grounds.
Omtatah and LSK petitioned the Court of Appeals for redress. The goal of the appellate court was to determine whether there were flaws in the applicable procurement laws.
The Court of Appeal affirmed the decision of the High Court except for the finding that the procurement of the SGR project was exempt from The Public Procurement and Asset Disposal Act of 2005.
In procuring the SGR project, Kenya Railways Corporation also failed to comply with and violated Article 227 (1) of the Constitution, Sections 6(1), and 29 of the Public Procurement and Disposal Act (PPDA), 2005.
Kenya Railways subsequently appealed to the Supreme Court, which reversed the decision.
Supreme Court Voids Ksh500 Billion SGR Verdict, Delivering Relief to Uhuru
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