A report by the Auditor General has brought into question the Sh2.2billion discrepancy in accounts between the Kenya Ports Authority (KPA) and the Kenya Railways Corporation (KRC) generated from the standard gauge railway (SGR) operations.
According to the report by Auditor General Nancy Gathungu tabled in Parliament on Wednesday, Kenya Railways said it received Sh12.08billion as SGR freight revenue from KPA which differs from records by the port which indicate that it remitted Sh14.3billion.
“Records maintained at KPA reveal that the reported SGR freight paid to the corporation amounted to Sh14,308,854,700 thus resulting in an unreconciled variance of Sh2,227,111,105,” a report by Auditor General Nancy Gathungu reads.
“The completeness and accuracy of SGR revenue of Sh12,081,743,595 from KPA could not be confirmed,” it added.
Gathungu raised questions on figures KRC reported on passenger revenue indicating that more than 90 percent was unaccounted for.
She noted that it was impossible to confirm the amount posted from passenger operations.
“Kenya Railways reported earning Sh1.369 billion from passenger operations in the 2020/21 financial year, out of which Sh1,321,041,380 was not supported with the system or manually generated SGR daily passenger records and extracts or passenger manifests,” the report reads.
However, this isn’t the first time that Kenya Railways has been on the spot over loan defaulting.
Kenya Railways generated Sh17.49billion from its core activities with SGR operations accounting for Sh13.57billion.
In 2020/21 fiscal year, SGR assets depreciated by Sh19.69 billion, a 33 per cent growth from a depreciation of Sh14.8 billion in the previous financial year.
According to Kenya Railways, the SGR track is the asset losing value at the highest rate, having depreciated by Sh5.3 billion in the 2020/21 fiscal year alone.
Further, interest on the SGR on-lent loan of Sh569 billion by the end of June 2021 increased by more than 220 per cent between 2020 and 2021, to Sh17.53billion.
The government defaulted on repayment of the loan from the Exim Bank of China in the 2020/21 financial year.
“The management did not make repayments during the year under review towards this loan. The payables and accrued charges reflect a balance of Sh50,920,344,125, which includes a default penalty payable balance of Sh644,343,297,” the report stated.
“Loan records reveal that the corporation incurred the penalties and interests on the on-lent loan due to non-settlement of the maturing obligations as and when they fall due,” it added.
