The Public Service Commission (PSC) has begun a review of how Kenya Railways Managing Director Philip Mainga was secretly handed an extension to his term in the dying days of the Jubilee Administration, a move that has made it difficult for the government to do an overhaul at the institution.
Mainga took over the job substantively in January 2020. Before then, he was the acting boss at the state corporation after the suspension of the former boss Atanas Maina in August 2018 on corruption allegations.
The current MD’s contract was supposed to end in January this year yet he is still in office courtesy of a backroom deal made just before the last general elections in August.
“The board of Kenya Railways Corporation (KRC) extended his term by three more years,” a source at the corporation said.
At least eight of the 15 rich state corporations and agencies, which had a combined revenue of Sh538 billion based on their latest financial reports, have had both the board chairperson and managing director/director-general, changed in the last eight months.
This is as President Ruto’s government attempts a turnaround in the running of not only the poorly performing state agencies, but also the government’s cash cows, effectively extending a tradition past governments have practised.
Among corporations and agencies with new leadership include Kenya Electricity Generating Company (KenGen), which has new board chair and MD. Mr Julius Migos Ogamba was appointed KenGen board chairman in March, joining Mr Abraham Samoei who is a new MD, having been appointed following the promotion of his predecessor, Rebecca Miano, to a Cabinet position. The two now lead teams making important decisions for the company with Sh49 billion revenues, Sh4.7 billion profits and over Sh500 billion in assets by last year.
KENYA POWER
Kenya Power is another state firm with new faces in the board chair and MD positions, with Mr Joseph Siror having been appointed MD about a week ago, to join Ms Joy Brenda Masinde who was appointed board chair in December. Kenya Power is a critical state firm, with the highest revenues among all govern agencies and companies—Sh157 billion—and valued at Sh329 billion in assets by 2022.
At Kenya Pipeline Company, valued at over Sh140 billion in assets, Ms Faith Boinett was appointed board chair in December, with Mr Joe Sang returning to the helm of the company as MD last month.
At Kenya Railways however, it is the board that has partially been changed. Mainga who is accused of blatant corruption is using his deep pockets to stay in office. He has bribed members of the new board, journalists and even politicians who have dared to bring up the issue.
His fear is that his deals will be known once he leaves office. Like for instance the MD executed a flawed deal with Africa Star Railways (Afristar), the Chinese operator for the SGR line, which ran largely unchecked where Kenya Railways lost up to Sh.1.4m daily. The contract was signed during Atanas Maina’s tenure and was initiated by Mainga himself.
Mainga is also alleged to have unilaterally leased Kenya Railways facilities (container yards and buildings) at Makongeni Nairobi for ten (10) years without any internal procedures or reporting to the board for approval as expected.
STORAGE CHARGES
A whistleblower report says that Mainga did this while with the full knowledge that KPA had actually taken over the property in October 2018 without formal handing over and also that the property was being used by Kenya Railways to earn twenty-three million (23,000,000.00) a month and to date Railways have lost over four hundred million shillings (400,000,000.00) in form of transport of containers of ICDN and storage charges.
It goes further to poke holes into leasing and extension of leases within Nairobi Railway city, “Mr. Mainga recommended for leasing and extension of leases for Kenya Railway land with a full knowledge that there was ongoing development Nairobi Railway City master plan by Kenya Railway and Nairobi County Government.” It states.
LEASING
Leasing of SGR Nairobi Station area, Syokimau Station, and adjoining areas, “Mr. Maingi recommended for leasing of over hundred (100) acres of Kenya Railway land with the full knowledge that there was ongoing development plan which was being undertaken by Kenya Railways, Ministry of Lands, County Government of Nairobi and Machakos County.”