HomeNewsSGR early handover stalls after Chinese firm refuses to comply

SGR early handover stalls after Chinese firm refuses to comply

The plan for an early handover of the Standard Gauge Railway (SGR) from Afristar to te Kenya Railways has stalled. This follows a disagreement between the two firms after Afristar refused to comply with the set terms.

Afristar came into existence weeks prior to the launch of the Madaraka Express Way. According to the contract of May 2017, the Chinese company would manage the SGR operations until 2027.

The contract is, however, unevenly balanced as it emancipated the contractor from any responsibility, forcing the Keny railways to part with some money each month, which they must pay every quarter and in advance.

As a result, the Kenyan government has over the past few months pushed silently for the handover from the Chinese firm to the Kenya Railways earlier before the 2022 general elections.

On the other hand, Kenya Railways tried bringing the Chinese company on the negotiating table to no avail. They hoped Kenya Railways would start operating the SGR soon.

But some sources disclose that specific individuals helping Afristar will stop at nothing to ensure the company continues running operations of the SGR.

The moves leave the government cringing on how it will free itself from the reigns that cost taxpayers at least Ksh 1.5 billion monthly, for such a large project that’s yet to break even and start bringing in some profit.

Sources aware of the rift between Kenya Railways and Afristart say problems began after experts advised Kenya Railways to reduce the contract period for the Nairobi Suswa SGR.

That happened in April, with Kenya going one month into the pandemic. To date, SGR stopped offering services to passengers, and the worst being the deterioration of Suswa SGR.

Afristar has requested to operate the route for another three months. They have, however, failed to reach an agreement with the Kenya Railways on how to reduce the entire project cost of operation.

Related news