June 28th 2017

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Raila alleges massive scandal over Mombasa Port concession

Can President Uhuru Kenyatta prove to Kenyans that the so-called loan from the United Arab Emirates was not a bribe to sway the contract in favour of Dubai? Can the President explain to Kenyans how he ended up giving the job to Dubai instead of any of the more than ten firms that came top?

By Free Press Correspondentnewsdesk@kenyafreepress.comSunday, 26 Mar 2017 18:43 EAT

Mr Odinga (c) addresses the media accompanied by governors Hassan Joho (Mombasa), Amason Kingi (Kilifi) and John Mruttu (Taita Taveta) and Siaya senator James Orengo among other leaders.

CORD leader Raila Odinga has accused the Jubilee government of irregularly obtaining a Sh28 billion loan whose usage has not been determined by Treasury officials. The loan from the United Arab Emirates was in exchange for Kenya's delivery of a concession agreement for Dubai Port World to run a major terminal at the Mombasa Port that was developed with Japanese funding, Mr Odinga claimed.

In a statement to media house, Mr Odinga asserted that the UAE firm tendered for management of the port but fell short behind 12 other companies, raising questions as to how the contract was awarded to it. Below is a statement Mr Odinga issued this morning in Mombasa, where he led an opposition NASA rally at Tononoka Grounds.

PRESS STATEMENT BY RT. HON RAILA ODINGA:
MARCH 26TH 2017

On the 26th of October 2016, the Government of the Republic of Kenya signed a bilateral cooperation agreement with the Government of the United Arab Emirates. In that agreement, the Government of the United Arab Emirates agreed to lend to the Government of Kenya a concessional loan to the tune of approximately 275 million US dollars (about Sh28 billion).

The loan was supposedly to be used in the development of the Port of Mombasa including what the agreement called “enhancing operational and business efficiencies within the Second Container Terminal” in addition to the development of Kipevu Oil Terminal. A whiff of corruption hangs all over this so-called loan as it leaves more questions than answers. We are here to seek very specific answers from none other than the President of the Republic of Kenya Mr. Uhuru Kenyatta.

First, this so-called loan looks more like a bribe to senior persons in government than a loan. It has been given on condition that the Government of the United Arab Emirates will appoint an agent to operate, manage and undertake the expansion of the Second Container Terminal of the Port of Mombasa. UAE went ahead to appoint Dubai Port World (DP World) to manage the facility.

It would appear the UAE did not win but purchased the management of our second container terminal at a cost of 275 million US dollars. Dubai Port, which has been given the contract to manage the second container terminal in Mombasa, was defeated by about 12 other port operators which expressed interest in managing the second terminal.

All these international port operators, from countries with mega port operations like China, Japan, Singapore, and the Netherlands participated in the tender and emerged on top of the defeated Dubai Port. In the tender, Chinese consortium PSA International, which had partnered with a local group – Multiple Hauliers – emerged top.

Can President Uhuru Kenyatta prove to Kenyans that the so-called loan from the United Arab Emirates was not a bribe to sway the contract in favour of Dubai? Can the President explain to Kenyans how he ended up giving the job to Dubai instead of any of the more than ten firms that came top? What was the purpose of the tender when the job ended up being given to a defeated bidder?

We also find the purpose of the so-called loan extremely fuzzy. It appears someone was desperate to find a reason to hand over the port to Dubai, hence an agreement that is all over the place. The agreement says the loan will be used to enhance the operations of the second container terminal and the development of the Oil Terminal.

The loan, according to the agreement, can also be used for the financing of other projects including the Special Economic Zones, other port infrastructure and other capacity building and community development initiatives. Loans are usually sought for specific projects. This particular one appears to be looking around for something to finance as long as the port is delivered. It is a case study in avoiding accountability for money disbursed. It can later be claimed to have financed anything and everything.

Can the President explain whether Kenya sought a loan from the UAE and what we needed the loan for? Can he explain to Kenyans the terms of repayment for this so-called loan? Can the President explain to Kenyans how the Dubai loan, if at all it is a loan and not a bribe, is a better deal than what we would get from other institutions like the World Bank or other nations? Why did it come just when the United Arab Emirates was seeking to manage our port?

The second container terminal was funded and built by the Government of Japan. Having funded and built the project, Japan had realistic expectations that it would be given the chance to manage and operate it.

Can President Kenyatta explain to Kenyans how Japan became a bad bidder and the implications for Kenya of this cold-blooded breach of trust? Did Japan lose because it failed to pay bribes?

We are aware that in August 2015, the chief representative of the Japan International Corporation (Jica), Mr Hideo Uguchi, wrote to the National Treasury to protest against the manner in which Kenya was meddling with the process of selecting an international company to operate the second container terminal. In the letter, Japan warned that that the meddling could affect its aid to Kenya.

Can the President explain to Kenyans how Japan’s misgivings were addressed and how the decision to award the tender to Dubai affects the terms of the loans lent to us by Japan on concessionary terms?

Finally, we want the President to assure Kenyans that he has no personal interest in having the Middle East firm manage our port and that he has no personal stake and gain in the so-called loan to Kenya in return for the port being managed by Dubai? We have reason to believe there is conflict of interest in this matter.

THE RT HON RAILA ODINGA
MOMBASA
MARCH 26, 2017

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