Nairobi News


Halted SGR construction costing taxpayers Sh37.9m daily

Kenya Railways is losing Sh37.9 million daily following the suspension of the construction of the Sh327 billion standard gauge railway on a piece of land in Mombasa, a court heard.

Through lawyer Cecil Miller, the corporation said the situation will continue to get worse should the court order stopping the construction remain.

“It is not in the public interest to sustain the orders, “Mr Miller told Mombasa Environment and Land Court Judge Ann Omollo.

According to the corporation, it has been losing 376,000 US dollars every day since the construction was suspended by the court on June 24. The loss is attributed to workers pay, expenses for running sites and for contracted supplies.

Mr Miller opposed the application by African Gas Oil Company Ltd to have the construction halted pending hearing and final determination the suit, arguing that the court should balance the rights of the petitioner and the public.

African Gas Oil Company stopped the rail construction on the strength that it’s yet to receive Sh519 million awarded to it by the National Land Commission as compensation for ceding the land for the mega project.

But transfer of the funds were stopped after African Gas Oil ownership of the land was questioned.


Mr Miller added that the corporation and the government had entered into multiple contracts for the construction of SGR hence orders stopping the exercise will cause them to be in breach leading to penalties which the tax payers will have to take care of.

“The petitioners claim is compensation, all they want is money, there is no need for conservatory orders to be granted, they have a remedy in terms of money,” said Mr Miller.

Mr Miller further argued that 80 per cent of the construction of the SGR from Mombasa to Nairobi had already been completed hence stopping it is unjustified.

China Road and Bridge Corporation (K) Ltd who are constructing the SGR said the orders stopping the construction have been issued on a property acquired by the government and which does not belong to the company.

Through lawyer Wamuti Ndegwa, the contractor said the orders of the petition cannot enforce an award granted to company.

“The effect of the order is giving back the land with expensive installation (to the petitioner), even if the order is given it cannot help the petitioner get his claim,” said Mr Ndegwa.

Mr Ndegwa said the quality of the structures which have been put up continue to deteriorate since they need to be maintained and that materials at the construction site are being stolen.

He added that they are paying millions of shillings for machines which have been hired describing the loss as huge.


Lawyer Michael Oloo for African Gas Oil Company Ltd said his client is the registered proprietor and still has interest in the land.

“There is no evidence of dispute placed before you or an affidavit (over the land) said Mr Oloo.

Mr Oloo said since the awards for compensation were issued, his clients had written several letters to the respondents without getting any response.

He argued that argued that prior to the acquisition of the land by the government, the company wanted to put a ‘massive’ container freight terminal petitioners land and that there is no reason why the government has refused to pay compensation money.

In the petition, the company is seeking among others an injunction against Kenya Railways and the CRBC from carrying any construction works on the parcel of land until it is compensated in accordance with the law.

The Attorney General and the National Land Commission have also been named as respondents in the suit.

The court extended the interim orders suspending the construction of the SGR until it delivers its ruling on July 22.

The article first appeared on the Business Daily