The Kenya Railways on Wednesday, November 13, dismissed reports published in one of the local publications, indicating that the agency had defaulted on its Standard Gauge Railway (SGR) loan obligations to China.
According to the Kenya Railways, the publication misrepresented facts when it reported that it had defaulted on a Ksh167.5 billion that was borrowed from China.
The parastatal revealed that it had no existing records of a loan deal that it had entered with China Exim Bank as per the records of the allegations, insisting that the only concessional agreement signed by the Authority is with the National Treasury.
''The Corporation wishes to state that there is no default on the SGR loan repayments and that the information presented in the story is misleading in its entirety. Kenya Railways has an On-lent loan with the National Treasury and not with China, Exim Bank, based on the signed financing agreements’’ Kenya Railways shared in a statement.
Kenya Railways further stated that the Exim Bank loan and On-lent loans, which are loans borrowed by one individual or institution then lent to another, were completely two different financing agreements with different terms and conditions. This is the case with the SGR loan according to Kenya Railways.
''The China Exim loan and the On-lent loans are two different financing agreements with different terms and conditions. KR is only privy to the On-lent loan terms and agreements,’’ it added.
According to the publication, it had alleged that the parastatal had defaulted on a Ksh167.5 billion loan borrowed from China through the National Treasury.
Kenya Railways revealed that it has continued displaying record performances in terms of the revenues that it generates from the transport sector, making it difficult for it to default.
Consequently, the parastatal revealed that it was committed to ensuring all its financial obligations, as well as sustaining its operations.
''It is important to note that the Corporation's performance has witnessed a significant growth trajectory over the past 6 years from 2017, and in the last two financial years freight tonnage has exceeded the 6 million tonnes target, to over 6.39 million tonnes by the end of the 2023/24 financial year,’’ Railways added.
''Kenya Railways remains committed to meeting its financial obligations and sustaining its operations.’’
