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SGR did not generate Sh. 10.33 billion sales last year, Kenya admits

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SGR Revenue: The Standard Gauge Railway line did not generate sales worth Sh. 10.33 billion in 2018. This has been disclosed by the government in a report that downgraded the railway line’s revenue.

The downgrading report now says that the SGR only generate sales worth Sh. 5.7 billion, which is nearly 44 per cent below what had been claimed earlier.

A report that appeared in the Business Daily says that the Kenya National Bureau of Statistics (KNBS) failed to disclose the reasons behind the downward revision of the numbers by up to 44 per cent, turning the spotlight on the tracking and collection of SGR earnings data. It also signals that the mega project would take longer to break-even.

SEE MORE: Why China said no to Uhuru’s Sh. 368 billion SGR loan request

“The performance data released earlier showed SGR earned Sh. 10.33 billion against the annual operation costs estimated at Sh. 12 billion. Freight services, which started in January 2018, generated Sh. 4 billion in the year to December against the initial announcement of Sh. 8.72 billion, the KNBS statistics indicate,” says the report.

Recently, Kenya failed to secure a loan that would have facilitated the construction of the railway line from Naivasha to Kisumu. The SGR, as at now, ends in Naivasha, a conclusion that has further fueled doubts on its viability.

The report on SGR revenue further says:

“The data show China Communications Construction Company, the operator, sold slightly more than 1.66 million tickets, earning Sh. 1.61 billion in revenue during the year. The income was not enough to meet the operation costs, which were earlier estimated at Sh. 1 billion a month or Sh12 billion a year. This prompted an increase in freight charges this year and decision to raise passenger fares for children on Mombasa-Nairobi trains by 100 per cent in a bid to raise more revenue to pay the Chinese operator. The SGR line has struggled to attract adequate cargo volumes with investors balking at the tariffs to transport goods from the Mombasa port to the Inland Container Depot in Nairobi.”

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