A suspected multi-million-shilling ticketing fraud has hit the Mombasa-Nairobi train service with detectives investigating a complex web that involves insiders skimming off a significant portion of revenue from each trip, the Sunday Nation can reveal.
On Friday, things took a dramatic turn when the Ethics and Anti-Corruption Commission (EACC) detectives in Mombasa arrested three senior Chinese officials and their four Kenyan counterparts working for the China Road and Bridge Corporation (CRBC) — the operator of the Madaraka Express — for attempting to bribe investigators.
They will be charged in court on Monday. They are being held at Port Police Station in Mombasa.
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, but investigators told the Sunday Nation more CRBC officials had recorded statements in Nairobi and Mombasa and there could be further arrests.
Mombasa EACC boss George Ojowi told the Sunday Nation 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.
DCI boss George Kinoti, who had promised to check and give us feedback on the arrests, did not respond to our follow up texts.
Kenya Railways Police Commander Ayub Gitonga said investigations were still on without giving any further details.
“I am aware of the matter but I cannot divulge more as the issue is still under investigation,” said Mr Gitonga.
Multiple sources, who spoke in confidence, 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.
Intense monitoring revealed that the passengers who had allegedly been refunded were indeed inside the train ready to travel.
It is not clear how long the fraud had been run but well-placed sources within the ticketing docket said there are indications of up to Sh1 million per day on all trips having been stolen.
Additional reporting by Mohamed Ahmed