Auditor General queries Rift Valley Railways Sh400m payment
The Auditor General Edward Ouko has questioned Kenya Railway’s decision to pay South African company Rift Valley Railways (RVR) Sh416.9 million for the destruction of tracks during the 2007 Post-Election Violence.
Ouko says the basis of the claim and calculation of the money paid to RVR from a fund established for the Standard Gauge Railway (SGR) feasibility studies remains unclear.
“Although evidence available indicates that the Treasury approved full settlement from the fund earlier earmarked for SGR feasibility studies, the basis of claim and how the payment of Sh416,886,693 was calculated and arrived at remained unclear by June 30, 2015,” Ouko told the Public Investments Committee (PIC) during the scrutiny of the corporation’s accounts for the year ending June 2015.
According to Ouko Kenya Railways paid RVR Sh416.9 million following the destruction of the Nairobi-Nakuru railway line on April 2009 and during the Post-Election Violence that followed the disputed election in which opposition leader Raila Odinga claimed he was rigged out of the election.
In its report on the audited books of accounts for State corporations, PIC says RVR demanded for compensation of Sh416,886,673. The payment is described as extra-ordinary expenditure for settlement of a political risk event in line with the concession agreement.
“The committee observed that the corporation incurred expenses in respect of settlement of political risk claims by the Rift Valley Railways following the uprooting of sections of the Nairobi-Nakuru railway line on April 2009 and political disturbances in 2007 for restoration of works undertaken pursuant to the contract on the conceded assets,” Adan Keynan, who chairs PIC, said as quoted by Business Daily.