The SGR contract’s tough terms between Kenya and China are now public.
The SGR was one of Kenya’s most expensive infrastructure projects when it was first introduced, costing Kenyans $3.8 billion.
SGR cost increased 10 times, according to Billionaire and businessman Jimi Wanjigi.
Between Mombasa and Nairobi, the railway was constructed by the Jubilee administration for Sh 327 billion, and between Nairobi and Naivasha, it cost Sh 150 billion.
The cost of the railway from Naivasha to Kisumu was originally estimated to be Sh 380 billion, but a lack of funding forced a change in strategy that led to the upgrading of the meter gauge railway line.
The SGR deal’s difficult conditions are now public;
Kenya to get a loan from China for $1.6 billion (Ksh190.77), plus a commitment charge of 0.25%.
42.06% of the SGR’s earnings to be used to pay back the loan.
The loan has a term of 20 years and a grace period of 7 years.
Kenya was required to create a Nairobi-based inland container depot and handle the necessary customs clearance.
Kenya was required to create a Railway Development Fund that would be used first to pay back loans related to the project.
Kenya’s chosen market for sourcing whatever items it buys with SGR funds is China.
Only Chinese arbitrators will be allowed to settle any issues.
Kenya will keep the terms of the transaction confidential and won’t divulge them without Exim Bank of China’s permission.
The Borrower is required to maintain all provisions of this Agreement’s terms and conditions absolutely private.
The Borrower shall not divulge any information hereunder or in connection with this Agreement to any third person, except required by applicable law, without the prior written agreement of the Lender, it stated.
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