Revealed: 'Secret' Company that Runs SGR Demands Sh30 Billion from Kenya Railways

It has now emerged that the Standard Gauge Railway (SGR) is run by a company that was 'secretly' established in May 2017.

The Sunday Nation reports that it obtained documents showing that the SGR is not directly operated by China Road and Bridge Corporation (CRBC), a State-owned Chinese company, as agreed in the initial contract.

The publication says documents in its possession showed that the SGR is operated through a “special purpose operating company” dubbed Africa Star Railway Operation Company.

The Sunday Nation reports that CRBC is the company's majority shareholder but the other shareholders remain unknown with details unavailable at the Registrar of Companies in Nairobi.

Africa Star Railway Operation Company is reportedly demanding a staggering Sh30 billion from Kenya Railways Corporation, which it terms as ‘pending payments’ and a fine of Sh800 million for late payments.

“Before the operations started, documents show, Kenya was compelled to lend the operator an interest-free Sh3.5 billion."

"A special reserve account was also set up to be maintained with Sh3 billion to cushion the operator. The contract also put punitive clauses pushing Kenya to start operating the railway by June 1, 2017. Any delay in starting the line would attract a fine of Sh24.2 million a day, the contract shows,” the Sunday Nation reports.

The company was to earn Sh13.3 billion in its first six months of running the passenger service trains.

Under the confidential contract, the company has the right to manage the ticketing system and any associated software and hardware.

The operator also collects passenger fares, including non-cash revenues streams like M-Pesa.

Shockingly, the secret contract also states that the operator can only cater for repair bills of below Sh100,000. Line maintenance bills also should not exceed Sh5 million per year.