This archive report was first published on 10 December 2019.
Published on December 10, 2019, a multi-agency team was formed to review the contracts awarded to China Road and Bridge Corporation (CRBC) for the Standard Gauge Railway (SGR) project.
The review aimed to ensure Kenya protected its interests and assets, following concerns that the country might have put its assets as security for the loan, including the Port of Mombasa.
CRBC has withheld key details in the review, citing that the information is sensitive and private. However, the contract awarded to CRBC has several gaping holes, including:
- Train operational charges fixed at KSh1.3 billion per month, or about KSh40 million daily.
- Variable costs in case the number of return trips exceeds three during peak seasons.
- Freeing CRBC of all liability, but forcing Kenya Railways to pay the fixed monthly service charge, which must be paid quarterly and in advance.
- The directive that operations start by June 1, 2017, with delays attracting a KSh24.2 million fine daily.
- Insurance premium of KSh 170 million.
As of November 1, 2019, the invoiced amount was $476 million (KSh47.6 billion), with Kenya Railways approving KSh43 billion and KSh7.3 billion already paid.
Kenya is set to repay KSh50 billion of the loan by the end of 2020, with the country readying itself to pay the first KSh25 billion installment for the construction and locomotives loan next month, following the expiry of the five-year grace period.
