Reality hits UHURU as China takes over SGR after Kenya failed to settle its debt – This spells doom for the country

 

Monday, August 9, 2021 – The Standard Gauge Railway is set to remain under the control of a Chinese firm called Afristar, which is majorly owned by China Road and Bridge Corporation (CRBC).

This was triggered by Kenya’s failure to settle a debt owed to Afristar which amounts to Ksh38 billion for services provided. 

According to Kenya Railways Corporation (KRC) Chairman Omudho Awita, Kenya started negotiations to take over some of the operations conducted by Afristar in 2019 under conditions that it would settle outstanding debts owed to Afristar, a condition Kenya has not yet met.

Afristar manages the landing and offloading of cargo, the ticketing system, and the collection of fares including non-cash payments as per the 2017 agreement.

Parliament has already raised alarm over the SGR’s high operational costs, which amount to Ksh1 billion per month – exclusive of loan servicing charges.

The National Assembly’s Finance committee, in a report tabled in 2020, called for the operating cost to be slashed by 50 percent to expedite the handover of SGR services to Kenya Railways. 

From March this year, Kenya started a gradual takeover of some duties from the Chinese firm in a plan to fully take over the operations from May 2022.

These duties include; ticketing, security and fueling of the SGR and cargo trains.

The Ksh38 billion owed adds insult to injury as it increases the Ksh420 billion debt that Kenya borrowed to facilitate the construction of the modern rail from Mombasa to Nairobi and for the purchase of engines and coaches.

The line was then linked to another from Nairobi to Naivasha that cost Ksh 162.9 Billion, a loan which was also sourced from China.