Kenya Railways Corporation has defaulted on a Sh167.5 billion loan borrowed from China for the Standard Gauge Railway (SGR), representing 62% of the total Sh266.5 billion debt owed to the Treasury by State agencies.
The default triggers penalties estimated at Sh1.6 billion, while the total SGR debt has ballooned to Sh737.5 billion from the original Sh539 billion borrowed from China Exim Bank, marking a 36.8% increase due to unpaid interest and principal installments.
The railway's financial struggles stem from insufficient revenue generation, with SGR operations posting an operating loss of Sh7 billion over two years despite earning Sh73.4 billion from cargo and passenger operations over five years to 2023.
