Kenya Hit With Ksh266 Billion SGR Bill
The governments of Kenya and Uganda are currently involved in arbitration in London over the construction of the Standard Gauge Railway (SGR) project, which is valued at Ksh266.4 billion (USD 2.0059 billion).
Two companies, KU Railways Holdings Limited and RVR Investments (PTY) Limited have filed claims at the London Court of International Arbitration stating that the two governments breached their contracts.
According to a statement from Parliament, Phillip Mainga, the Managing Director of Kenya Railways, mentioned that the case was initiated in April 2020 and is still ongoing.
According to reports, the two governments signed multiple contracts with different companies for the construction and operation of the railway to move both freight and passengers.
It is mentioned that the Kenyan government’s construction of the Standard Gauge Railway interfered with the railway lines between Kenya and Uganda.
It is said that the agreements signed by the railway companies from both nations involved transferring their railway assets to RVR in exchange for receiving 11.1% of the gross revenue during the concession term.
The agreement was set to start right away and would be valid for 25 years for freight services and 5 years for passenger services.
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Nonetheless, the agreement did not proceed as planned after it was reported that RVR had closed its offices.
“One of the main claims against GoK is that the construction of Standard Gauge Railway (SGR) by Kenya directly harmed RVR because the tracks for the two lines shared a common right of way in most locations”, Mainga explained.
On March 5, Justin Muturi, the Attorney General of Kenya, was present at the arbitration hearings held in London.
The Committee is set to consult with the National Treasury and the Office of the Attorney General to find a peaceful resolution to the issue.
Furthermore, the Managing Director of Kenya Railways mentioned that in addition to the quoted amount of Ksh266 billion from the case, the company also owed money to China Exim Bank.
The Corporation stated that the Treasury obtained a loan to fund the SGR project, to repay the debt using the income generated from the project. However, the expected revenues have not yet been achieved even after several years.
Kenya Hit With Ksh266 Billion SGR Bill
