The Chinese government faced a backlash as a court has declared an ambitious project by China as illegal. An appellate court in Kenya has declared a $3.2 billion railways contract awarded to China Road and Bridge Corporation (CRBC) to be illegal.
The court declared this while reviewing a High Court ruling. The court has said that state-run Kenya Railways violated the country’s law in procuring the $3.2 billion Chinese funded Standard Gauge Railway (SGR) project . This project falls under China’s One Belt One Road (OBOR) initiative .
The Exim Bank of China has earlier sanctioned two loans of $1.6 billion each for the construction of a railway line from Mombassa to Nairobi which was later extended to Naivasha.
After a large section of the route was operationalised in 2017, Africa Star Railway Operation Company which is a subsidiary of Chinese CRBC, was awarded the contract to manage operations. The state-run Kenyan railways currently owes $380 million to Africa Star Railway in management fees.
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