This archive report was first published on 10 June 2020.
Published on June 10, 2020, a report by the National Assembly's Budget and Appropriations Committee (BAC) has raised concerns over the government's failure to pay Ksh38 billion to Africa Star Railway Operation Company, a Chinese firm contracted to run the SGR trains.
Africa Star Railway Operations Company, majority-owned by China Road and Bridge Corporation (CRBC), was contracted in May 2017 to manage the passenger and cargo trains on the SGR.
The committee warned that failure to pay the pending bills could see the company pull out of daily operations, grounding the SGR project.
According to the report, Africa Star manages the ticketing system, landing and offloading of cargo, and collection of passenger fares, including non-cash revenues.
Committee Chairperson Ichung'wa stated in the report, 'Pending bills arising from operations of the standard gauge railway have accumulated to Sh38 billion and this may force the operator to pull out of the daily operations of the project.'
However, Kenya Railways, the contracting organization, denied receiving any protest letter from Africa Star or Parliament, stating that it had not been furnished with the report.
The Sh38 billion in pending bills add to the Ksh420 billion borrowed to build the modern line from Mombasa to Nairobi and purchase of engines and coaches.
The SGR project has been struggling to meet revenue targets, with cargo and passenger trains generating Ksh3.92 billion in the four months ended April, a decrease of eight percent from the same period last year.
