Transport and Infrastructure ministry is set to deploy a team of bureaucrats to Melbourne as Kenya starts negotiating the terms under which Australian construction firm, John Holland, will manage the Standard Gauge Railway (SGR).
John Holland, which is said to have 65 years of experience in engineering servicing, contracting and managing rail projects, became a subsidiary of China Communications Construction Company (CCCC) following an acquisition deal finalised in 2015.
Transport principal secretary Nyakera Irungu said the team set to leave on June 11 comprises officials from Kenya Railways Corporation (KRC), Kenya Ports Authority (KPA), Treasury, Office of the Attorney-General and the Ministry of Transport.
“We are going to China and Australia to conduct due diligence on John Holland, the firm that will jointly manage SGR with CCCC,” said Mr Irungu.
“During the trip, we will find out how John Holland will operate the rail, the capacity that they can accommodate, what they bring on board and how they will eventually integrate local expertise into the project.”
Of importance also to Kenya is how freight, which is the key revenue attraction in the SGR, will be handled at the port of Mombasa.
The deal to offer CCCC the contract was reached at a summit of the East African Community heads of State attended by President Uhuru Kenyatta in Kampala last month.
“They directed that the contractors for the Mombasa-Kampala section undertake operations in the interim as the two partner states build their local capacities,” read a statement from the summit.
Rift Valley Railway (RVR), which has been managing the existing rail, will face more competition for the freight business if the deal is successful. The RVR, operates the Kenya-Uganda railway.
The Mombasa–Nairobi SGR is expected to be completed in June next year. Initially there were plans to seek an operator through open competitive tendering.
The KRC in March started the search for transaction advisers to help procure an operator for the Sh357 billion line. The advisers had up to April 22 to submit their bids.
Taking shape
Already, the SGR progress is taking shape with 80 per cent of the civil works completed. The KRC has begun acquiring 56 trains and 1,620 freight wagons for SGR line, they are expected to arrive by March next year ahead of June completion of the line.
“We have given the contractor approval to procure the train and freight, we are also inspecting three companies that will be used to make the trains,” said KRC managing director Athanas Maina.
Mr Irungu said that by March next year, the trains will be tested on the new line. “It is John Holland that will do all the work at this time for the next five years, and we will build accountability that comes with the contractor being an operator.”
Source: Business Daily
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