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Is Default the Next Step for Kenya’s Embattled Standard Gauge Railway?

The Chinese-financed and built Standard Gauge Railway is losing money at an unsustainable rate of $9.2 million per month prompting renewed calls in parliament for the State House to renegotiate the $3.2 billion of loans used to construct the Nairobi to Mombasa line.

Earlier this year, Kenya Railways defaulted on a $370 million payment to the China Road and Bridge Corporation subsidiary that runs the railway and based on the findings of a new parliamentary report submitted last week, it looks increasingly likely that KR will not be able to meet future obligations as well.

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