Is Default the Next Step for Kenya’s Embattled Standard Gauge Railway?

The Chinese-financed and built Standard Gauge Railway is losing money at an unsustainable rate of $9.2 million per month prompting renewed calls in parliament for the State House to renegotiate the $3.2 billion of loans used to construct the Nairobi to Mombasa line.

Earlier this year, Kenya Railways defaulted on a $370 million payment to the China Road and Bridge Corporation subsidiary that runs the railway and based on the findings of a new parliamentary report submitted last week, it looks increasingly likely that KR will not be able to meet future obligations as well.

Although critics contend that the SGR was poorly planned from the beginning, and destined to fail, government and parliamentary supporters blame the ongoing pandemic for the railway’s financial troubles. “The government should initiate the process of renegotiating the loan terms of the SGR with the lender (China) due to the prevailing economic distress occasioned by the effects of COVID-19,” recommended the parliamentary report.

Read more on this story on the Global Construction Review website.

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The post Is Default the Next Step for Kenya’s Embattled Standard Gauge Railway? appeared first on The China Africa Project.



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