President Uhuru Kenyatta as he launches the SGR cargo train in Mombasa, May 30, 2017. Photo by NMG
The government of Kenya, has revealed that it is seeking another loan of 368 billion Kenyan Shillings to help in the completion of the construction of the Standard Gauge Railway (SGR).
Speaking on the loan sought for by the government, China’s Chargé d’affaires Li Xuhang stated that the money would be granted to the government in form of concessional and hard loans.
Kenya Railways Acting Director Phillip Mahinga also confirmed Kenya’s acquisition of the loan from China noting that: “We all know that the first phase of SGR from Mombasa to Nairobi cost Ksh327 billion and the second phase Ksh150 billion. For phase 2B, negotiations between the two governments are on so I will not give any figure at the moment,” he said.
He added that the full details would be disclosed during the official opening of the Naivasha terminal in May.
The Acting Director Philip Mahinga also stated that the corporation is involved in talks of financing a system that will ensure the railway, its passengers, goods and equipment are secure as they navigate through sparsely populated regions in their 974-kilometre journey from Mombasa to Malaba in Busia County. “SGR trains move 6,000 people daily, and we are concerned about our operations and security of the equipment. The movement of trains from Mombasa to western Kenya needs to be secure from terrorists and other challenges. We ask the Chinese government to support us in this area.”
However, despite the government seeking the loan, Kenyans and various experts have raised alarms on the repayment status of the existing loans.
The government has overtime, been asked to clearly highlight the repayment plan of the loans following allegations that the Mombasa port could be handed over to the Chinese as a way of servicing the previous defaulted loans.
Mr. Li Xuhang the Chargé d’affaires to China said during a press briefing attended by officials from the National Treasury, the Ministry of Transport and Infrastructure, the Kenya Railways Corporation and officials from the SGR management, that the railway has created more than 50,000 jobs locally and boosted Kenya’s economic growth by 1.5 percent, adding that Kenyans form a majority of the SGR managers and employees (2,723 Kenyans, as opposed to the 828 individuals from other countries.), and that their safety is guaranteed, “contrary to negative reports in the media”.
25 out of a total of 33 stations, have already been handed over to well-trained local managers.
Regarding working conditions at the railway line External Communications Officer for the China Road and Bridge Corporation Zhao Yang said “It is important that working conditions are improved to ensure that Kenyans are happy with the immediate and future benefits of SGR. It is important that Kenyans own it”. He also added that “It will be very useful and popular once it reaches Kisumu,”.
The Mombasa to Nairobi railway earned $100 million (1 billion Kenyan Shillings) in the 2017 to 2018 financial year, according Mr. Xuhang.
