SGR to be fully run by Kenyans from next year but not many are for this idea

SGR to be fully run by Kenyans from next year but not many are for this idea

  • While the takeover may sound like good news for the country, it is the worrying situation of other State corporations that has got many  Kenyans concerned. 

Opinion among Kenyans is divided on the fate of the Standard Gauge Railway (SGR) whose operations are set to be fully taken over by the Kenya Railways Corporation (KRC) from the 1st of May, 2022.

Africa Star Railway Operation Company (AfriStar), a subsidiary company of China Road and Bridge Corporation (CRBC) which constructed the SGR, has since confirmed it will fully hand over to Kenya running of the railway within the next five months.

While the takeover may sound like good news for the country, it is the worrying situation of other State corporations that has got many  Kenyans concerned. 

First, the Kenya Railways Corporation (KRC) which will be taking over the running of SGR has been on a loss-making trend. 

According to figures contained in the Consolidated National Government Investment Report 2020, Kenya Railways recorded a loss of Ksh.24.2 billion in the period ending June 30, 2020, compared to KSh 8.5 billion in the previous financial year.

In addition, KRC is reeling from the highest stock of outstanding loans to the government that the State procured to enable it to implement the SGR project.

On the other hand, some Kenyans point out that the state of loss-making Posta Kenya, Kenya Pipeline, Kenya Airways among others could be an indicator of what will become of the SGR.

The cost of operating the SGR has been an issue of concern with data from the Ministry of Transport indicating that it costs taxpayers Ksh.1 billion monthly to operate the Mombasa-Nairobi line.

AfriStar has also previously incurred operation loss running into billions which has seen Kenya Railway Corporation default on an estimated Sh40 billion payout to the Chinese firm. 

Data on the National Treasury's external debt register shows that as of June 30, 2020 the total SGR outstanding loans stood at Ksh.507. The loans are owed to the China export-import bank (Exim) and are designated in dollars.

Other Kenyans are also worried about the infamous faceless cartels, who might be waiting to seize any opportunity to cash in on the SGR.

Here are reactions from Kenyans on the upcoming full takeover of SGR operations by KRC:

"While this is a good idea and I know I may come off as a hater or pessimist, this will be the beginning of bureaucratic inefficiency and poor customer service," says Shirley Sein.

"Wacha ikae na Chinese please because by end of May this will be completely run down. I love my people but I don't trust their expertise," adds Karey Mwari.

"Wakati utasikia wafanyikazi wamekaa miezi kadhaa bila mshahara , By that time the port of mombasa will be MANDARIN ZONE ONLY," states Mume Ole Nguvuze.

Isaac Obiero says: "This thing will end up being bailed out year in and year out. Eventually, operations will stop and we will still be paying for the loan."

"Your view is quite optimistic. “Cartels” will probably take over and any of a million things will go wrong to bring about inefficiencies that’ll force people to use the means of transport they(cartels) own and provide," Twitter user Yule Msee states.

Africa Star Railway Operation Company (AfriStar) was contracted by Kenya Railways to manage SGR operations and maintanance for 10 years from 2017 but the agreement was later reviewed allowing the Kenyan government to takeover by May 2022.

Kenya Railways had commenced a gradual takeover of SGR operations in March this year by assuming functions including ticketing, security and fuelling.