This archive report was first published on 10 June 2020.
Kenya Railways' failure to pay Sh38 billion to Africa Star Railway Operation Company Ltd, a Chinese firm contracted to operate the trains, has put the services of the standard gauge railway (SGR) at risk.
According to the National Assembly's Budget and Appropriations Committee, the unpaid bills have accumulated to Sh38 billion, which could force the operator to pull out of the daily operations of the project.
Kenya Railways has disputed the pending bills claims by Africa Star, which has been operating the VIP passenger trains since May 2017. The contract between Kenya Railways and Africa Star requires Kenya Railways to pay the maintenance fees, but Africa Star can only foot repair bills of less than Sh100,000.
The Sh38 billion in pending bills add to the Sh420 billion that Kenya borrowed to build the modern line from Mombasa to Nairobi and purchase of engines and coaches.
Kenya Railways has also increased passenger fares from Sh700 to Sh1,000 for first class travellers in 2018 in an effort to shore up the trains' revenues. However, the revenues have fallen by eight percent in the four months to April from similar period last year.
On June 10, 2020, Transport and Infrastructure Secretary James Macharia defended the cargo transport directive, saying it was meant to improve efficiency at the port in line with international requirements.
