22 June 2012

Kenya: Sh26 Billion KRC Case Put Off

An application by a Chinese investor who seeking Sh26 billion from Kenya Railways Corporation (KR) over alleged breach of contract will be heard next week. Although the application by Erdemann Property ltd had been set for hearing yesterday, one of the lawyers representing Kenya Railways was reportedly out of the country.

Consequently, Justice Alfred Mabeya directed the respondents in the case who include KR and the Registered Railways Staff Retirement Benefit Scheme to file their responses ahead of the hearing on June 27.

In the application through lawyer Gichuki King'ara, the company seeks to amend its earlier application to "include information which was inadvertently omitted" at the time of filing the suit. In a statement sworn by the Erdemann's director Ze Yun Yang, the company wants to be allowed to include the land reference numbers of the properties that should be preserved, even if the case will be referred to an arbiter. The director says the amendment will give a full and candid picture of the matters that gave rise to the suit.

In the case, the investor wants to be compensated accusing KR of breaching an agreement in which the company was construct Sh40 billion golf city project in Nairobi. The company won the 2009 tender to convert the current Railways Club golf course into a golf city with a five-star hotel on a 63-acre piece of land along Haile Selassie Avenue and Uhuru Highway.

But the project never started as contemplated as a dispute arose between the company, Kenya Railways and trustees of the Kenya Railways Staff Retirement Benefit Scheme which co-owns the property. The developer then moved to court for protection.

The project was to comprise a 100-room five star hotel, a 600-room four star hotel, a nine-hole golf course and a golf club house with a modern leisure, business and shopping facilities. Yesterday, Justice Mabeya said parties should discourage technicalities so that the matter could come to a conclusion and directed KR and the Scheme to file their response.

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