China slaps Kenya with Sh1.3bn fine for defaulting on SGR loan
Passengers boarding a Madaraka Express train at the Nairobi Terminus to Mombasa.
Kenya defaulted on repayment of the Chinese loans provided to build the standard gauge railway (SGR), highlighting the country’s struggles with the mounting public debt.
The Chinese banks fined Kenya Sh1.312 billion in the year ended June for loan defaults, according to Treasury documents seen by Business Daily.
Kenya tapped over half a trillion shillings from Chinese lenders, led by the Export-Import Bank of China, to fund the construction of the SGR from Mombasa to Naivasha.
Taxpayers have been forced to shoulder the burden of the SGR loans because revenues generated from the passenger and cargo services on the track are not enough to meet the operation costs, which stood at Sh18.5 billion in the year to June against sales of Sh15 billion.
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