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China Debt Rises As SGR Records Sh21 Billion Loss


The Standard Gauge Railways (SGR) has recorded a loss of Sh21 billion in three years to may hence rising China’s debt.

According to a report by the Transport Ministry to Parliament, the China-built railway netted Sh25.03 billion in revenue over the period against operational costs OF Sh46.71 billion.

The loss has consequently forced the Kenya Railways Company (KRC) to default on an estimated Sh40 billion payout to China’s Africa Star Railway Operation Company, which runs both passenger and cargo services on the SGR.

Read: LSK’s Havi Faults Court Ruling On SGR, Suspects Foul Play From State

The loss has been attributed to failure to attract adequate Cargo volumes with ideally investors balking at the tariffs for transporting goods from the Port of Mombasa to the Inland Container Depot (ICD) in Nairobi.

In June, Court of appeal judges Justice Martha Koome, Judge Kairu and Jamilla Mohammed made the ruling that they were not persuaded the procurement of SGR followed due constitutional procedure since it did not go through a competitive bidding process.

Reports indicate that Kenya has been under pressure to repay the SGR loan despite facing tough economic effects due to the Coronavirus pandemic.

Read Also: Kenya Railway Splashes Millions In Newspaper Ad Responding To Sh1 Billion SGR Grass Lawns

The details of the contract between the Kenyan government and China Road and Bridge Corporation (CRBC) on the Standard Gauge Railway (SGR) have remained under the wraps, despite the pressure from the public to make it open.

Last year, CRBC refused to share the crucial information to a task force mandated to review the Ksh327 billion SGR that had been termed as skewed.

A team comprising of representatives from the Presidential Delivery Unit, the Office of the Attorney-General, Kenya Railways (KR), Ministry of Transport, the National Treasury and CRBC had been formed to review the contracts to ensure Kenya protected its interests and assets.

By the end of 2020, Kenya was expected to have repaid at least Sh50 billion of the loan.

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Written by Mercy Auma

Passionate about human interest stories and politics. Email

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