NAIROBI, Kenya – Lawmakers are pushing for reforms to strip financiers of the power to determine who consults on and implements projects funded by their loans, in a move that could significantly alter Kenya’s tendering process.
The proposal, if adopted, would mark a major shift from the current system, where lenders not only provide funding but also have a say in selecting contractors, consultants, and feasibility study firms.
At the heart of this push is a contentious clause in the financing agreement for the $60 million (Sh7.74 billion) Bus Rapid Transit (BRT) project along Nairobi’s Outering Road.
The agreement between the Kenyan and South Korean governments stipulates that only South Korean companies or entities registered in South Korea are eligible to bid for consultancy and implementation.
A group of MPs, however, is opposing this condition, arguing that such lender-imposed restrictions should apply only to grants and not to loans, which must be repaid by taxpayers.
Rarieda MP Otiende Amolo and members of the Public Accounts Committee (PAC) have raised constitutional concerns, arguing that the agreement effectively locks out Kenyan firms from a project that will ultimately be repaid with taxpayers’ money.
“This is outright discrimination and explicitly unconstitutional. You cannot negotiate a contract to be paid by the very people who are now excluded from benefiting from it,” Amolo said during a PAC session reviewing the BRT project’s progress.
He cited Section 42 of the Public Procurement and Disposal Act, 2015, which allows exemptions for bilateral or multilateral agreements but stressed that such exemptions must still align with constitutional principles.
Lawmakers are concerned that the restrictive bidding clause undermines Kenya’s procurement laws and constitutional safeguards against discrimination.
The BRT project, aimed at improving Nairobi’s public transport system, has already faced delays and legal challenges, raising further concerns about its timely completion and adherence to national procurement regulations.
Defending the agreement, Roads and Transport Principal Secretary Joseph Mbugua argued that concessional loans often come with conditions set by the donor country.
“Concessional loans, which offer low-interest rates and long repayment periods, typically include concessions such as requiring the donor country’s companies to execute the project,” Mbugua told the committee, chaired by Butere MP Tindi Mwale.
Despite this explanation, committee members have called for a renegotiation of the financing terms to eliminate what they view as a discriminatory clause and ensure compliance with Kenyan laws.
Lugari MP Nabii Nabwera emphasized the need for greater transparency and fairness in the procurement process.
“The fundamental issue here is fairness to Kenyan companies and taxpayers. We cannot continue to accept loans that exclude our people from participating in projects they will ultimately pay for,” Nabwera said.
