• He noted that this trend has highly disadvantaged Kenya in the many ways
•Duale says local companies do not have state support to compete against state-backed companies from China.
Former National Assembly Majority leader Aden Duale has requested a detailed statement by the Transport Ministry on all the contracts awarded to Chinese linked companies from 2013 to date.
In a statement dated January 26, Duale said the high borrowing from China and awards of contracts to Chinese linked companies has created a vicious cycle of borrowing from China to pay China.
Further, he noted that this trend has highly disadvantaged Kenya in many ways including local well-established companies in the Energy, Infrastructure and ICT shutting down.
The local companies do not have the financial power and state support to compete against state-backed companies from China.
This has had a ripple effect in job creation as young brilliant graduates with engineering degrees have now resorted to menial jobs to survive.
The Garissa Township MP has also linked the high China-Kenya contracts to high currency risks associated with high demand for US dollars to settle a debt owed and settlement of payment of contracts to Chinese linked companies.
Kenya’s total debt stood at Sh7.99 trillion as of September last year, according to a report by Controller of Budget Margaret Nyakang’o.
"The exchange rate of one US Dollar to Kshs has depreciated from approximately Sh80 in 2013 at the start of SGR project to Sh114 as of today," Duale said.
He has therefore requested the Transport CS James Macharia to provide a breakdown of all contracts awarded by all the state agencies in the Ministry from FY 2013/2014 to date.
He also wants the CS to detail the total amount of contracts awarded for each China State-owned or Chinese linked company undertaking projects in the Transport, Infrastructure, Housing, and Urban Development.
This, he said, should include a breakdown for each company and the total amount paid so far from financial 2013/14 to date.
"Provide technical and financial verifiable measures that the government has put in place to support local contractors to effectively compete against the state-backed companies from China," Duale wrote.
Similarly, he requested a breakdown of the total number of professional engineering graduates employed by the Chinese linked companies from 2018 to 2022.
Duale added, "The names of local companies and amounts of sub-contracts that the China State-owned or Chinese linked companies have awarded to local contractors as a way of capacity building and technology transfers from the FY 2013/14 to date."
According to the lawmaker, the government paid approximately Sh645 billion to China Linked or China state-owned companies.
This is 65 per cent of the total actual expenditure of Sh975.2billion in the Energy, Infrastructure and ICT sector.
"The China State-owned or Chinese linked companies are riding on the ballooning China government is lending Kenya which has increased to the US $ 7.09billion (approximately Sh797.8 billion) to amass contracts in the Energy, Infrastructure and ICT Sector.