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Chinese firm withholds key detail in SGR deal review

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PAUL WAFULA

By PAUL WAFULA
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A team tasked with reviewing the skewed contract between Kenya and the Chinese firm operating the Sh327 billion standard gauge railway (SGR) has hit a dead end.

This comes after China Road and Bridge Corporation (CRBC), the contractor, refused to provide key information protected by the confidentiality clauses in the controversial contract, on the grounds that it was “sensitive and private”.

“The negotiation for a review of the operation and maintenance contract did not progress because the operator refused to provide information that would enable the team to determine reasonable costs of SGR operations,” a highly-placed source said.

This comes even as Kenya readies itself to pay the first Sh25 billion instalment for the construction and locomotives loan next month, following the expiry of the five-year grace period in line with the May 11, 2014 loan agreement to finance the Jubilee government’s pet project. Another Sh25 billion will fall due in June next year.

Kenya has already set aside Sh35 billion in the supplementary budget to take care of the repayment to China’s Exim Bank next month.

By the end of 2020, Kenya is expected to have repaid at least Sh50 billion of the loan.

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A multi-agency team was formed after concerns were raised on the need to take a fresh look at various contracts that had been awarded to CRBC to ensure that Kenya protected its interests and assets, as well as removed any touchy issues.

To revisit the contracts, the team comprising officials from the Presidential Delivery Unit, the Office of the Attorney-General, Kenya Railways (KR), Ministry of Transport, the National Treasury and CRBC was set up.

It was led by Transport Principal Secretary Esther Koimett, whose previous role as Kenya’s Investment Secretary and now as the ministry’s accounting officer put her in good stead.

But, after a number of preparatory meetings, the process stalled and appears to have been shelved altogether.

“We asked for data to help us come up with the regression analysis formula and inform the renegotiations, but this was not provided,” the source said.

Based on the operations contract, Kenya Railways currently owes CRBC over Sh31 billion in fixed and variable costs, which have to be paid by the exchequer since the operator had not been able to break even.

The total debt for the SGR project in January 2020 will be over Sh60 billion.

Meanwhile, CRBC claims that it is becoming increasingly difficult to continue working without the payments from Kenya Railways, and has come up with measures to sustain its operations.

It has communicated these measures to KR and the Ministry of Transport.

As at November 1, the invoiced amount was $476 million (Sh47.6 billion). Kenya Railways approved Sh43 billion and so far Sh7.3 billion has been paid.

Kenya Railways is also struggling to pay security fees for the trains. It is also supposed to come up with Sh170 million as insurance premium.

To deal with the cash flow problems, CRBC says it will be forced to suspend salaries for expatriates and insurance medical cover as well as the transfer allowance if KR does not pay it soon.

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CRBC came into the picture during the Grand Coalition government headed by President Mwai Kibaki, when some of the initial contracts were signed.

The firm sought favour with top officials from KR and the Transport ministry with the blessing of the Prime Minister’s office.

It was allowed to do a “free” feasibility study, which turned out to be the document that set it apart as the preferred supplier of almost everything.

After the study, it was awarded the contract to build the railway line from Mombasa to Nairobi, having found a financier back home.

It also bagged the next contract to procure coaches and locomotives, known as rolling stock.

Together with its affiliates, it got the contract to supervise the construction, and finally, to operate and maintain the line.

But CRBC is operating the trains through its subsidiary, Africa Star Railway Operation Company, adding to the confusion over who to deal with.

Trouble started when it emerged that Kenya could have exposed its assets, among them the Mombasa port, as security for the loan.

It also emerged that the contract was hurriedly drawn up in a government-to-government deal.

The worst provisions had to do with security. The contract put Kenya’s strategic assets at home and abroad at risk of being seized by the Chinese government in the event of a default.

Also, any disputes are to be governed by Chinese laws. To operate the trains, CRBC charges a fixed Sh1.3 billion per month, or about Sh40 million daily.

It also loads other charges, known as variable costs, when it increases trips during peak seasons or when it does more than three return trips a day.

“Kenya took the demand risk and that is why it is our job to ensure the trains are full while the CRBC assumed the operations risk,” the source said.

Mid this year, the operator sent Kenya Railways a fee note of Sh30 billion in pending payments.

It also slapped Kenya with penalties amounting to Sh800 million for late repayments of its operation fees.

The contract also frees the operator of all liability but forces KR to pay the fixed monthly service charge, which must be paid quarterly and in advance.

“What we need is a formula that can help determine the fixed and variable costs. What we have is an arbitrary fee such that we cannot work backwards or accurately to forecast as required in any costing model,” another source said.

A special reserve account with Sh3 billion to cushion CRBC was also opened.

The contract also made it imperative to start operations by June 1, 2017. Any delay would attract a Sh24.2 million fine daily.

The money generated from ticket sales is deposited in a reserve bank account, together with all payments from Kenya Railways.

This must be done within 24 hours. “The Operator shall also, as an agent of KR, manage a system for collection of non-cash revenue, including payment utilising the M-Pesa cash transfer platform,” the contract says.

During a live NTV interview on December 28 last year, President Uhuru Kenyatta promised to release the SGR contract to put to rest any “porojo” (rumours) that the Chinese could seize the Port of Mombasa if Kenya defaulted on its payments.

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Public officers above 58 years and with pre-existing conditions told to work from home: The Standard

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Head of Public Service Joseph Kinyua. [File, Standard]
In a document from Head of Public Service, Joseph Kinyua new measure have been outlined to curb the bulging spread of covid-19. Public officers with underlying health conditions and those who are over 58 years -a group that experts have classified as most vulnerable to the virus will be required to execute their duties from home.

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However, the new rule excluded personnel in the security sector and other critical and essential services.
“All State and public officers with pre-existing medical conditions and/or aged 58 years and above serving in CSG5 (job group ‘S’) and below or their equivalents should forthwith work from home,” read the document,” read the document.
To ensure that those working from home deliver, the Public Service directs that there be clear assignments and targets tasked for the period designated and a clear reporting line to monitor and review work done.
SEE ALSO: Thinking inside the cardboard box for post-lockdown work stations
Others measures outlined in the document include the provision of personal protective equipment to staff, provision of sanitizers and access to washing facilities fitted with soap and water, temperature checks for all staff and clients entering public offices regular fumigation of office premises and vehicles and minimizing of visitors except by prior appointments.
Officers who contract the virus and come back to work after quarantine or isolation period will be required to follow specific directives such as obtaining clearance from the isolation facility certified by the designated persons indicating that the public officer is free and safe from Covid-19. The officer will also be required to stay away from duty station for a period of seven days after the date of medical certification.
“The period a public officer spends in quarantine or isolation due to Covid-19, shall be treated as sick leave and shall be subject to the Provisions of the Human Resource Policy and procedures Manual for the Public Service(May,2016),” read the document.
The service has also made discrimination and stigmatization an offence and has guaranteed those affected with the virus to receive adequate access to mental health and psychosocial supported offered by the government.
The new directives targeting the Public Services come at a time when Kenyans have increasingly shown lack of strict observance of the issued guidelines even as the number of positive Covid-19 cases skyrocket to 13,771 and leaving 238 dead as of today.
SEE ALSO: Working from home could be blessing in disguise for persons with disabilities
Principal Secretaries/ Accounting Officers will be personally responsible for effective enforcement and compliance of the current guidelines and any future directives issued to mitigate the spread of Covid-19.

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Uhuru convenes summit to review rising Covid-19 cases: The Standard

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President Uhuru Kenyatta (pictured) will on Friday, July 24, meet governors following the ballooning Covid-19 infections in recent days.
The session will among other things review the efficacy of the containment measures in place and review the impact of the phased easing of the restrictions, State House said in a statement.
This story is being updated.
SEE ALSO: Sakaja resigns from Covid-19 Senate committee, in court tomorrow

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Drastic life changes affecting mental health

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Kenya has been ranked 6th among African countries with the highest cases of depression, this has triggered anxiety by the World Health Organization (WHO), with 1.9 million people suffering from a form of mental conditions such as depression, substance abuse.

KBC Radio_KICD Timetable

Globally, one in four people is affected by mental or neurological disorders at some point in their lives, this is according to the WHO.

Currently, around 450 million people suffer from such conditions, placing mental disorders among the leading causes of ill-health and disability worldwide.

The pandemic has also been known to cause significant distress, mostly affecting the state of one’s mental well-being.

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With the spread of the COVID-19 pandemic attributed to the novel Coronavirus disease, millions have been affected globally with over 14 million infections and half a million deaths as to date. This has brought about uncertainty coupled with difficult situations, including job loss and the risk of contracting the deadly virus.

In Kenya the first Coronavirus case was reported in Nairobi by the Ministry of Health on the 12th March 2020.  It was not until the government put in place precautionary measures including a curfew and lockdown (the latter having being lifted) due to an increase in the number of infections that people began feeling its effect both economically and socially.

A study by Dr. Habil Otanga,  a Lecturer at the University of Nairobi, Department of Psychology says  that such measures can in turn lead to surge in mental related illnesses including depression, feelings of confusion, anger and fear, and even substance abuse. It also brings with it a sense of boredom, loneliness, anger, isolation and frustration. In the post-quarantine/isolation period, loss of employment due to the depressed economy and the stigma around the disease are also likely to lead to mental health problems.

The Kenya National Bureau of Statistics (KNBS) states that at least 300,000 Kenyans have lost their jobs due to the Coronavirus pandemic between the period of January and March this year.

KNBC noted that the number of employed Kenyans plunged to 17.8 million as of March from 18.1 million people as compared to last year in December. The Report states that the unemployment rate in Kenya stands at 13.7 per cent as of March this year while it stood 12.4 per cent in December 2019.

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Mama T (not her real name) is among millions of Kenyans who have been affected by containment measures put in place to curb the spread of the virus, either by losing their source of income or having to work under tough guidelines put in place by the MOH.

As young mother and an event organizer, she has found it hard to explain to her children why they cannot go to school or socialize freely with their peers as before.

“Sometimes it gets difficult as they do not understand what is happening due to their age, this at times becomes hard on me as they often think I am punishing them,”

Her contract was put on hold as no event or public gatherings can take place due to the pandemic. This has brought other challenges along with it, as she has to find means of fending for her family expenditures that including rent and food.

“I often wake up in the middle of the night with worries about my next move as the pandemic does not exhibit any signs of easing up,” she says. She adds that she has been forced to sort for manual jobs to keep her family afloat.

Ms. Mary Wahome, a Counseling Psychologist and Programs Director at ‘The Reason to Hope,’ in Karen, Nairobi says that such kind of drastic life changes have an adverse effect on one’s mental status including their family members and if not addressed early can lead to depression among other issues.

“We have had cases of people indulging in substance abuse to deal with the uncertainty and stress brought about by the pandemic, this in turn leads to dependence and also domestic abuse,”

Sam Njoroge , a waiter at a local hotel in Kiambu, has found himself indulging in substance abuse due to challenges he is facing after the hotel he was working in was closed down as it has not yet met the standards required by the MOH to open.

“My day starts at 6am where I go to a local pub, here I can get a drink for as little as Sh30, It makes me suppress the frustration I feel.” he says.

Sam is among the many who have found themselves in the same predicament and resulted to substance abuse finding ways to beat strict measures put in place by the government on the sale of alcohol so as to cope.

Mary says, situations like Sam’s are dangerous and if not addressed early can lead to serious complications, including addiction and dependency, violent behavior and also early death due to health complications.

She has, however, lauded the government for encouraging mental wellness and also launching the Psychological First Aid (PFA) guide in the wake of the virus putting emphasis on the three action principal of look, listen and link. “When we follow this it will be easy to identify an individual in distress and also offer assistance”.

Mary has urged anyone feeling the weight of the virus taking a toll on them not to hesitate but look for someone to talk to.

“You should not only seek help from a specialist but also talk to a friend, let them know what you are undergoing and how you feel, this will help ease their emotional stress and also find ways of dealing with the situation they are facing,” She added

Mary continued to stress on the need to perform frequent body exercises as a form of stress relief, reading and also taking advantage of this unfortunate COVID-19 period to engage in hobbies and talent development.

“Let people take this as an opportunity to kip fit, get in touch with one’s inner self and  also engage in   reading that would  help expand their knowledge.

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