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Kenya Railways Announces Gradual Takeover Of SGR From Chinese Company

SGR
/courtesy

The Kenya Railways Corporation (KRC) is now partially in charge of Standard Gauge Railway (SGR) operations such as ticketing, security and fuelling.

This is according to KRC chairman Omudho Awitta who says that the state corporation has started a gradual takeover of operations of the railway line, which has been under the Chinese company Africa Star Railway Operation Company.

“KRC has not terminated its contract with Africa Star Railway Operation Company (AfriStar). We have negotiated so that we take over the running of the standard gauge railway (SGR). The contract between the two parties was to run for 10 years from 2017 with provision clause for review in the fifth year,” Mr Awitta told Business Daily.

Read: China Debt Rises As SGR Records Sh21 Billion Loss

AfriStar is a subsidiary company of China Road and Bridge Corporation (CRBC).

The company was contracted in 2017 to run the railway line for ten years, in which it will be in charge of all operations and maintenance, including ticketing software.

However, following a different agreement between the government and AfriStar, KRC is expected to take over operations and maintenance by May 2022.

“From March 1, 2021 KRC has taken over all staff working on ticketing function,” Mr Awitta said.

Currently, the government sinks over Ksh1 billion per month on the operations of the Mombasa-Nairobi railway alone, a figure that is expected to rise in the near future due to economic variables.

In the three years to May 2020, the SGR posted a combined operating loss of Ksh21.68 billion. This was after bagging Ksh25.03 billion in revenue over the period against operational costs totalling Ksh46.71 billion.

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Written by Francis Muli

Follow me on Twitter @francismuli_. Email francis@kahawatungu.com

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