Tuesday, 17 June, 2025
Implementation Committee gives Kenya Railways thumbs up after fact finding tour, told SGR loan to be paid up in three years
Mombasa County Friday June 13, 2025
A House Committee has commended Kenya Railways (KR) management for significantly improving efficiency and progressively implementing parliamentary resolutions concerning the Standard Gauge Railway (SGR).
The Committee on Implementation, during its inspection tour of the Railways facility in Mombasa today, was specifically following up on the implementation of recommendations contained in the Report of the Departmental Committee on Transport, Public Works, and Housing regarding the SGR's operations.
One major concern highlighted in the Departmental Committee on Transport's report was the substantial annual debt servicing obligation of approximately USD 356 million (Ksh 56 billion semi-annually) for the SGR project, which was financed by over Ksh 477 billion in Exim Bank of China loans.
The Committee had previously noted that SGR revenues were insufficient to cover both operating costs and loan repayments, necessitating government budgetary support and mid-year fiscal interventions.
During its fact-finding visit today, the Committee on Implementation observed that Kenya Railways has now taken over a significant portion of SGR management roles.
This is remarkable progress as compared to the findings of the Transport Committee in its June 2022 Report, when KR had assumed 40 out of 52 Operations and Maintenance (O&M) functions. However, high-value activities such as rolling stock maintenance, signaling, and dispatch services were still under Afristar or Original Equipment Manufacturer (OEM) control, though this was expected to decrease as localization progresses through this year.
In today’s visit, the Hon. Raphael Wanjala-led Committee was guided through the SGR's haulage operations, from the Port of Mombasa to various destinations (for cargo) and from Mombasa Terminal to Nairobi (for passengers). The Committee later help a brief meeting with KR management, led by Managing Director Mr. Phillip J. Mainga.
The Committee learned that while the SGR is not yet operating at its optimal capacity of 18 trains per day, it is actively working towards that goal, currently running 11-14 trains for both cargo and passengers. Members found this impressive when compared to neighboring countries with Standard Gauge Railways, which are operating at a much lower rate of 1.5-2 runs per day.
“It is quite impressive to note that though you may not be operating at maximum capacity, you are headed towards there. You now just need to ensure that you enhance efficiency towards optimal performance to remain at profitability,” Hon. Wanjala noted.
The Committee was particularly impressed to hear that Kenya has not defaulted on the SGR loan facility and has only three years remaining to clear the debt obligation on the project.
“Hon. Chair, I would like to inform the Committee that we have never defaulted on the SGR loan facility, and we are set to complete the payment in 2028,” MD Mainga noted.
When asked to clarify if the Mombasa Port was used as collateral for the facility, the MD explained that Kenya Railways operates independently and has been servicing the loan partially from its own generated revenue and with support from the exchequer.
“Hon. Chair, contrary to information out there, the government did not use the Mombasa port as collateral for this loan facility. We are an independent organization from Kenya Ports Authority and have been using our own revenue to service part of the debt with support from the government,” he clarified.
Members were also briefed on the process of hauling heavy-duty cargo, such as iron rolls, bars, and fertilizer, from ships to Naivasha via cargo train, where export cargo to Uganda is then processed.
MD Mainga hinted at plans to extend the SGR beyond Naivasha, noting the high demand for the current Medium Gauge Railway (MGR) service among passengers traveling to North Rift and Western Kenya, was clear indication there is need to extend their services to Western Kenya .
He further informed the Members that both the MGR and SGR services from Mombasa have been operating simultaneously, adding that clients transporting heavy cargo have no alternative besides the railway, as such cargo would exceed the maximum allowable axle load on Kenyan roads.
While acknowledging the impressive work and efficient service provided by Kenya Railways, the Committee faulted the management for what they termed a “lack of strategic communications.”
Committee Members Hon. Mark Mwenje, Hon. Julius Taitumu, Hon. Abdul Haro, and Hon. Kibet Komingoi urged the management to implement a robust communication strategy to effectively market the SGR service as an efficient haulage solution within the region.