BREAKING EVEN

Government to pay first instalment of SGR loan in January

CS Macharia said he is hopeful that the country will be able to pay back the loan from the revenue generated from SGR services.

In Summary

• Macharia on Wednesday said the SGR freight and passenger services are breaking even, and the state is ready to start settling the loan from China’s Exim Bank. 

• In May, the Treasury revised its budget to include Sh35 billion pay to China for the loan granted for phase 1 of the SGR project.

The government will settle the first instalment of the Sh324 billion Standard Gauge Railway loan in January next year, Transport CS James Macharia has said.

Macharia on Wednesday said the SGR freight and passenger services are breaking even, and the state is ready to start settling the loan from China’s Exim Bank. 

The financing for the SGR was formalised in May 2014.

The cabinet secretary said he is hopeful that the country will be able to pay back the loan from the revenue generated from SGR services.

In May, the Treasury revised its budget to include Sh35 billion pay to China for the loan granted for phase 1 of the SGR project.

“Kenyans should not be worried about this loan. The SGR will be able to pay it back by itself. In one day, we are doing about 10 trains, this means that we are breaking even,” he said.

Macharia said the government has an elaborate plan to ensure SGR pays back the loan on its own without placing the burden of repayment on the exchequer.

He said the Kenya Ports Authority is doing between eight to 10 trains daily from the port of Mombasa to the Inland Container Depot in Embakasi, Nairobi.

CS Macharia urged Kenyans to take advantage of the SGR infrastructure and stop complaining that it is “taking away their businesses”.

“People should not be worried that SGR is taking away their businesses, but rather look at the bigger picture of opportunities being created by this infrastructure,” he said.

As the first country to have the SGR in East Africa, Kenya should use it to its competitive advantage, the CS said. 

“We should look at the bigger picture, not just job losses in the truck business,” Macharia said. 

He said the Kenya Ports Authority and Kenya Revenue Authority are engaging all stakeholders on the controversial order for compulsory haulage of all imports via the SGR.

The CS spoke to journalists during the launch of the KPA 30-year Master Plan at Whitesands Hotel Mombasa. 

Macharia said they have set aside about three weeks for stakeholders’ engagement on the directive.

“KPA and KRA have all agreed that we must engage all the stakeholders, including the private sector on the use of SGR. Within two to three weeks, we shall have reached an amicable solution,” Macharia said.

On Tuesday, Macharia was forced to suspend the order on cargo haulage from Mombasa to Nairobi by use of the SGR following an uproar from MPs and transport stakeholders.

The suspension came hours after the National Assembly directed Macharia to appear before the Transport Committee on Thursday. 

The MPs want Macharia to explain how the government arrived at the directive issued last week, and which was set to take effect yesterday.

(edited by O. Owino)