The Supreme Court of Kenya on Friday, June 16, nullified a Court of Appeal ruling that found that procurement laws were flouted in the Ksh500 billion Standard Gauge Metre Railway (SGR) deal between Kenya and China.

A five-judge bench of the Supreme Court, comprising Deputy Chief Justice Philomena Mwilu and Justices Mohamed Ibrahim, Smokin Wanjala, Njoki Ndung'u, and William Ouko, ruled that the procurement process for the SGR project was undertaken in conformity with the provisions of Article 227 of the Constitution.

The judges also noted that the procurement was undertaken as a government-to-government contract and hence exempt from the provisions of the Public Procurement and Disposal Act, 2005.

"In addition, the SGR project was subject to interrogation before Parliament in two committees, and none of the respondents opted to be involved. The said parliamentary process, which is open to the public, cleared the projects. Under our constitutional design, the people have the power to exercise their oversight power through elected representatives who are domiciled in Parliament. Whether a citizen agrees with or was satisfied with what was undertaken is a matter of conjecture, provided that the laid-out procedure was followed.

"In the premises, we respectfully disagree with the appellate court and hold that the procurement process for the SGR project met the requirements of Article 227 of the Constitution as read together with the provisions of the PPDA, 2005," the verdict by DCJ Mwilu read.

The Court of Appeal had ruled in 2021 that the procurement of the SGR project was illegal and that the government should pay Ksh20 billion to the Kenya Railways Corporation (KRC) for the losses it incurred as a result of the illegality.

The Supreme Court's decision is a major victory for the government and a setback for the activists who challenged the procurement of the SGR project. The decision is also likely to have implications for other government projects that were undertaken through government-to-government contracts.

The SGR project was initiated by the late President Mwai Kibaki and has been a major priority for President Uhuru Kenyatta. The project has been criticized by some for its high cost and for the fact that it was financed through loans from China. However, the government has defended the project, saying that it is essential for Kenya's economic development.

The Supreme Court's decision is a major boost for the government's plans to continue with the SGR project. The government has said that it plans to extend the SGR to Mombasa and to other parts of the country.