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What is in a loan agreement? A lot. Some contracts risk the country’s strategic assets and sovereignty if there is a default in payment.

There are hidden economic, social, cultural, and environmental dangers, which a government will work hard to conceal from the public.

In Kenya, for instance, the law compels the State to publish and publicize any important information affecting the nation, such as multi-billion infrastructural contracts.

But the State has not complied.

That is why Okoa Mombasa Coalition, which Muhuri is a member, has filed an access to information request for the certified copies of contracts and documents relating to the construction and operation of Standard Gauge Railway (SGR) and Container Terminal Two (CT2) at the Kenya Ports Authority (KPA).

The government built Sh324.01 billion SGR and Sh27.3 billion CT2 using loans from China Exim Bank and Japan International Cooperation Agency, respectively.

“These loans are being serviced by the taxpayers who ought to know the content of what the government signed for,” Muhuri chairman Khelef Khalifa said on Thursday in Mombasa. He spoke on behalf of the Coalition.

The Coalition sent the request on December 17 to Principal Secretary, Ministry of Transport, Infrastructure Housing, Urban Development, and Public Works, and Managing Directors at KPA and Kenya Railways.

Also addressed are the Kenya National Bureau of Statistics Director-General and the Registrar General at State Law Office.

These officials have 21 days to respond.

“If they fail, we will take them to court,” Khalifa said.

Okoa Mombasa Coalition members.

Okoa Mombasa Coalition members Mesh Abdul, Khelef Khalifa, Roman Waema, and Francis Auma at press conference in Mombasa on December 19. Photo: © 2019 Ernest Cornel/Muhuri

Mysterious company

The request letter, which Khalifa signed, asked for the details of the agreement between the government and Africa Star Railway Operation Company Ltd, which runs SGR at Sh1.3 billion monthly.

Kenya signed a secret agreement with the Chinese allowing this mystery company – commonly referred to as “special purpose operating company” – with unknown local shareholders, to run the train. The company and its shareholding details are unavailable at the Registrar of Companies.

Kenya Transporters Association CEO Dennis Ombok said relevant government officials must provide details of registration of this company.

“This should include particulars of registration, details of all shareholders, and the proportion of shareholding for each shareholder,” Ombok said.

The Coalition also asked for a Memorandum of Understanding between Swiss-based Mediterranean Shipping Company (MSC) and Kenya National Shipping Line (KNSL) for the management of CT2.

Container Terminal Two case.

Muhuri, Dock Workers’ Union, and judiciary officials tour CT2. Photo: © 2019 Ernest Cornel/Muhuri.

Fast Action Summit member Mesh Abdul, also of Coalition said such access should include all annexures and associated documents.

CT2 deal will privatize the terminal, and render thousands of port workers jobless, Dock Workers’ Union (DWU) has said. A High Court in Mombasa in October this year stopped the privatization, saying supporting law was unconstitutional.  

DWU, Muhuri, and Taireni Association of Mijikenda had sued to stop privatization. The court noted the government was yet to publish the agreement between MSC and KNSL. 

Read the full request for SGR and CT2 contracts here.