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Belt and Road Initiative: end of the line for China’s Afristar rail firm in Kenya?
- Nairobi is ending its contract with the Chinese-owned operator five years earlier than initially planned
- Standard Gauge Railway will be taken over by Kenyan state railway manager
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Kenya is terminating its contract with Chinese-owned Africa Star Railway Operation Company (Afristar) for the operation of the Standard Gauge Railway, a move expected to save the country more than US$120 million in annual fees.
The East African nation announced that it would assume all the functions of the railway by May next year, five years earlier than originally planned.
Under the initial contract that China Road and Bridge Corporation (CRBC) signed with the Kenyan government, the Chinese company was to operate both passenger and freight trains for 10 years, but Kenya Railways said this was subject to review after five years. The passenger service started operations in June 2017 while the freight section launched in January 2018.
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Afristar is a subsidiary of Chinese State-owned CRBC, which built the 480km (300 mile) SGR, running from the port city of Mombasa to the capital Nairobi. The Export-Import Bank of China (Exim Bank) funded its construction to the tune of US$3.2 billion.
China Communications Construction Company, CRBC’s parent company, built an extension of the railway to Naivasha, a town in the Central Rift Valley, with Exim Bank funding US$1.5 billion for its construction.
02:09
Kenya opens massive US$1.5 billion railway project funded and built by China
Kenya opens massive US$1.5 billion railway project funded and built by China
Afristar was incorporated in Kenya in 2017 specifically to run the SGR, which is part of the Belt and Road Initiative – Chinese President Xi Jinping’s pet trade and infrastructure development plan – that has seen the construction of highways, railways and power plants across Africa, including the Addis Ababa-Djibouti Railway.
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