Kenyan railway hit by losses in first year

19 Jul 18

Kenya’s flagship Chinese-funded railway project has registered losses of $100m in its first year of operation.

The railway, which links the coastal city of Mombasa to the capital Nairobi, was funded by a $3bn loan from China’s Exim bank, to be repaid over 15 years, the BBC reported.

It is estimated that China owns 70% of Kenya’s debt, according to Kenya’s newspaper.

The Kenyan government has dismissed concerns that the railway is overpriced and unsustainable, but transport minister James Macharia told a parliament committee this week that the state is looking at how private industries can make rail transport more economically viable.

The project was a key part of president Uhuru Kenyatta’s re-election campaign, launched a few months before the vote last year.

Repayments begin next year. If the railway project does not break even, Kenyan taxpayers will have to pay, the BBC reported.

The Kenyan government has said it hopes the railway will start making a profit in the next financial year.

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