Friday, October 14, 2022 – Things are becoming extremely difficult for President William Ruto and his Deputy, Rigathi Gachagua, even as Kenyans await for them to lower the cost of living as they promised during campaigns.
Even before they settle in, China has already fined Kenya a whopping Sh1.3 billion for defaulting on the Standard Gauge Railway (SGR) loan.
Jubilee government tapped over half a trillion shillings from Chinese lenders, led by the Export-Import Bank of China, to fund the construction of the Standard Gauge Railway project.
As such, the country was expected to start loan repayment in January 2020 after the lapse of a five-year grace period that Beijing had given Kenya.
This is despite SGR making losses instead of profits.
For instance, the operational costs for SGR stood at KSh18.5 billion in the year to June against sales of KSh15 billion.
As such, the government of Kenya defaulted on a Chinese loan prompting the lender to fine the country to the tune of KSh 1.312 billion.
This comes at a time when Ruto has returned port operations to Mombasa, further dwindling the fortunes of the SGR.
The Jubilee administration built the railway at a cost of KSh billion between Mombasa and Nairobi and KSh150 billion between Nairobi and Naivasha, while the cost from Naivasha to Kisumu was projected to cost KSh380 billion before the lack of funding caused a change of plans, resulting in upgrading of the meter gauge railway line.
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