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Chinese Rail Operator to Kenya Railways: Settle Your Debts First and Then We’ll Hand Over Control of the SGR

File image of Kenya's Chinese-built Standard Gauge Railway. AFP/Simon Mania

Afristar, a subsidiary of the state-run China Road and Bridge Corporation, informed Kenya Railways that if it wants the May 2022 handover of the Mombasa to Nairobi Standard Gauge Railway to be completed on time, it’ll first have to pay off its debts, according to a report Monday in Business Daily.

The key debt in question is a $380 million payment that Kenya Railways (KR) failed to make last year and apparently did not reschedule with Afristar. Contrary to widespread concerns that Chinese creditors, namely the China Exim Bank, would exercise punitive clauses in the SGR contracts to garnish revenues from the Port of Mombasa in the event of a default, neither Afristar nor China Exim Bank exercised that option.

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