How the Ticketing Scam at the SGR Mints Billions from Kenyans

Will the taxes we pay in Kenya ever be in safe hands? After months of questioning the viability of the Standard Gauge Railway Project and claims of racism at the facility, the SGR is again in the spotlight and this time it is because of fraud running into billions of shillings.

Reports have emerged of a suspected multi-million-shilling ticketing fraud at the facility.

Anti-corruption detectives are investigating a complex web that involves insiders skimming off a significant portion of revenue from each trip made by the train.

 Three senior Chinese officials and their four Kenyan counterparts working for the China Road and Bridge Corporation (CRBC) — the operator of the Madaraka Express have already been arrested for attempting to bribe investigators.

They are being held at Port Police Station in Mombasa and are set to be presented in Court tomorrow.

The suspected theft, which was uncovered by Kenya Railways Corporation staff monitoring the Chinese operator, is the latest controversy to hit the Standard Gauge Railway (SGR), which is the single largest infrastructure project since independence.

The Chinese operators are reportedly paid at least Sh1 billion per month to operate the service besides the loan repayments and the latest revelations will turn the spotlight back to SGR, whose Phase 2 is under construction.

The three Chinese were arrested on allegations of attempting to bribe Directorate of Criminal Investigations (DCI) officers with Sh500,000.

Mombasa EACC boss George Ojowi confirmed that the Chinese expected to appear in court are the officer in charge of transport at the Mombasa terminal, the security officer and a translator.

“The investigations are ongoing and we expect to take them to court. We have the exhibit with us,” Mr Ojowi said, referring to the bribery allegations and the money recovered from the suspects.

The SGR ticket scandal investigation and the arrest has been a closely guarded matter since detectives went on their trail earlier in the week.

Multiple sources have confirmed that the ticketing scam, which involves manipulating the complex booking system operated by CRBC staff to split the ticket revenues between the Chinese railway operator and the cartel of insiders, has been going on for a long time.

According to the insider, one aspect of the scheme under investigation involves creating refunds for tickets already issued to passengers on board for each of the four trips and channelling the refunds elsewhere.

Kenya Railways officials are said to have raised the red flag over an unusually high number of refunds, triggering an investigation that is likely to unearth millions of shillings in lost revenue since President Uhuru Kenyatta launched the service on June 1, 2017.

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