These projects inter-alia include construction of roads, highways, and provisions for water supply, sewer extensions, street lighting etc. CRBC has contracted various local vendors for supply of raw material etc…reports Asian Lite News
Chinese companies operating in Africa have often been accused of showing laxity in projects, not following the laid down safety protocols thereby resulting in accidents and loss of assets related to projects. In some countries, once the projects get underway, the Chinese companies are learnt to mount pressure on host countries/companies to circumvent local laws for their own benefits.
A recent case of malpractice that has come to the fore is that of breach of contract by Chinese company China Road and Bridge Corporation (CRBC) in Kenya. Multiple infrastructure projects are being carried out by Chinese State Owned Enterprise (SoE) CRBC in Kenya under the umbrella of ‘Community Projects’. These projects inter-alia include construction of roads, highways, and provisions for water supply, sewer extensions, street lighting etc. CRBC has contracted various local vendors for supply of raw material etc.
Recently, several court cases have been filed against CRBC for failing to pay its sub-contractors in Kenya. In one such case, Tuk Chilo Ltd., a local Kenyan firm, alleged that CRBC had failed to pay over KES 44.3 million for the construction of various roads in Nairobi. Tuk Chilo Ltd. was subcontracted by CRBC to construct and upgrade roads in various informal settlements and densely populated areas in Nairobi Country. The business and operations of the Kenyan company have suffered irreparable loss and damages due to non-payment of dues.
In another case, JTG Enterprises Ltd served a ‘Demand Notice’ to CRBC for breach of contractual obligations viz. non-payment of dues. The notice accused CRBC of not releasing the retention money of the sub-contractors even after the passage of the default lock-in period and demanded that CRBC immediately and unconditionally admit liability for breach of the subcontract agreement. It asked CRBC to immediately release/pay retention money to JTG Enterprise that include two separate amounts viz. KES 19,89,921/- and 5,19,321/-. The notice further underlines that if the amount was not paid within seven days, legal proceedings may be initiated against CRBC. If the above payments are made in time, the two sides would then proceed to discuss the amount to be paid by CRBC to JTG Enterprises in lieu of damages for breach of contract.
Unconfirmed sources suggest that another local company MESTEC Cables Ltd. has also sent an invoice to CRBC amounting to around KES 60,000/-. The company is working as supplier to CRBC and is primarily engaged in manufacturing of steel bars and other material used in building and construction. Probably, another case is in the offing against CRBC as it is most likely to default on this vendor’s payment as well.
Taking into account above cases, the Kenyan government must realize that the integrity of Chinese companies is always doubtful. They suffer from poor image in corporate ethics. Corruption and criminality are often associated with Chinese funded projects. Before signing the contracts, the Kenyan government must ensure that these contracts have strict legal provisions that debar Chinese nationals from fleeing the country and put them behind bars in case of default on payment to local companies.
ALSO READ-CHINA’S DEBT TRAP DIPLOMACY: Kenya Goes Sri Lanka Way
