The Standard Gauge Railway is set to remain under a Chinese firm called Afristar, which is significantly owned by China Road and Bridge Corporation (CRBC).
This was triggered by Kenya’s inability to settle an obligation owed to Afristar which adds up to Ksh38 billion for services provided.
As indicated by Kenya Railways Corporation (KRC) Chairman Omudho Awita, Kenya started negotiations to take over some tasks led by Afristar in 2019 under conditions that it would settle debts owed to Afristar, a condition Kenya has not yet met.
Afristar deals with the arrival and offloading of freight, the ticketing system, and the assortment of fares including non-cash installments according to the 2017 understanding.
Parliament has effectively raised alert over the SGR’s high operational cost, which add up to Ksh1 billion every month – exclusive of loan overhauling charges.
The National Assembly’s Finance board of trustees, 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 began a progressive takeover of certain obligations from the Chinese firm in an arrangement to completely assume control over the operations from May 2022.
These obligations incorporated; ticketing, security and fueling of the SGR and freight trains.
The Ksh38 billion owed makes an already difficult situation even worse as it increases the Ksh420 billion debt that Kenya acquired to facilitate the construction of the ultra modern rail from Mombasa to Nairobi and for the acquisition of engines and coaches.
The line was then connected to another from Nairobi to Naivasha that cost Ksh 162.9 Billion, a loan which was additionally sourced from China.