Kenya Railways boss says SGR loan to be fully repaid by 2028
Kenya Railways (KR) Managing Director Phillip Mainga has announced that the country will fully repay its Standard Gauge Railway (SGR) loan by 2028, reassuring that there has been no default on the loan.
Appearing before the National Assembly’s Committee on Implementation during a fact-finding visit to Mombasa on Friday, June 13, 2025, Mainga said the debt, which amounts to over Ksh477 billion borrowed from the Exim Bank of China, is being serviced through a combination of internal revenue and exchequer support.
“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,” Mainga told lawmakers during the session chaired by Budalang’i MP Raphael Wanjala.
The Committee’s inspection was part of its follow-up on recommendations issued in the 2022 Transport Committee report, which had flagged SGR’s revenue shortfalls and called for improved loan repayment strategies and operational efficiencies.
Addressing misconceptions about the loan’s collateral, the Kenya Railways boss dismissed claims that Mombasa Port was used as security for the loan.
“Contrary to information out there, the government did not use the Mombasa port as collateral for this loan facility. We are an independent organisation from Kenya Ports Authority and have been using our own revenue to service part of the debt with support from the government,” Mainga clarified.
Assumption of SGR
During the visit, the Committee observed significant progress in Kenya Railways’ assumption of SGR management roles.
In a statement posted on the Parliament’s Facebook account on June 13, 2025, the lawmakers noted that KR has taken over a substantial portion of Operations and Maintenance functions, building on previous progress when the corporation had assumed 40 out of 52 O&M functions by June 2022.
“However, high-value activities such as rolling stock maintenance, signalling, and dispatch services were still under Afristar or Original Equipment Manufacturer (OEM) control, though this was expected to decrease as localisation progresses through this year,” the statement read.
The Committee further learnt that the SGR currently operates 11-14 trains daily for both cargo and passengers, while working towards an optimal capacity of 18 trains per day.
This performance, they said, compares favourably with neighbouring countries’ Standard Gauge Railways, which operate at much lower rates 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,” Wanjala noted.
SGR extension
The committee was also briefed on plans to extend the SGR line beyond Naivasha, with Mainga citing high demand for Medium Gauge Railway (MGR) services among passengers along the North Rift and Western Kenya routes as justification.
The lawmakers were informed on the process of hauling heavy-duty cargo such as iron rolls, bars, and fertiliser from ships to Naivasha via a cargo train, where export cargo to Uganda is processed.
“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,” the statement added.
