Spanish railway equipment manufacturer Construcciones y Auxiliar de Ferrocarriles SA (CAF) faces Brazilian antitrust investigations into alleged price-fixing collusion with European firms between 1998 and 2014. The company, which supplies spare parts and maintenance services for Kenya Railways' urban transport project, is among 16 firms and 52 individuals accused by Brazil's administrative council for economic defence (Cade) of forming a cartel to manipulate public transport contracts.
The probe revealed CAF, along with French firm Alstom and German company Siemens, allegedly bribed Brazilian officials to secure train construction and maintenance contracts. CAF has not publicly commented on the allegations, while Kenya Railways emphasized its procurement process adheres to technical and financial standards despite the supplier's legal challenges.
Kenya Railways' Sh10 billion urban transport decongestion plan includes 11 second-hand diesel multiple units (DMUs) from Spain's Serveia Ferroviaria de Mallorca (SFM), which CAF manufactures. The trains, acquired for Sh1.5 billion, are projected to last 20-25 years and are compatible with Kenya's meter-gauge system. Housing and Urban Development principal secretary Charles Hinga defended the purchase, citing significant cost savings compared to new units.
Cade's 2018 recommendation for convictions alleged the cartel divided tenders and fixed bid prices, undermining competition. Kenya Railways stated it would conduct further due diligence on CAF, with the procurement process approved by the Cabinet in 2019. The trains are set to operate on Nairobi Central Station and other key routes, with officials calling it a cost-effective solution to urban traffic congestion.
