The Chinese firm, China Road and Bridge Corporation (CRBC), has withheld key details in the recent SGR deal review, arguing that the information is sensitive and private.
This has ensued after a multi-agency team was formed to take another look at the contracts awarded to CRBC. This was a move that aimed at ensuring Kenya protected its interests and assets. The need for this arose after it emerged that Kenya might have put it assets as security for the loan, among them the Port of Mombasa.
Other gaping holes in the contract awarded to CRBC include:
- Train operational charges fixed at KSh1.3 billion per month, or about KSh40 million daily
- Variable costs in case number of return trips exceed 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
With all this in mind, as at 1st November 2019, the invoiced amount was $476 million (KSh47.6 billion). Kenya Railways approved KSh43 billion and so far, KSh7.3 billion has been paid.
In the meantime, Kenya is 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.
As reported by Daily Nation, Kenya has already set aside KSh35 billion in the supplementary budget to take care of the repayment to China’s Exim Bank next month.
By the end of 2020, Kenya is expected to have repaid at least KSh50 billion of the loan.