Infrastructure
Kenya’s standard gauge railway project to cost Sh1.02 trillion
The railway project commands a quarter of the total national loan.
Construction of a 969-kilometre standard gauge railway from Mombasa to Malaba is expected to cost Sh1.023 trillion, even as Kenya grapples with how to pay for what is billed as one of the largest transport infrastructure projects in the region.
The first phase of the project, which spans 472km from Mombasa to Nairobi, has consumed a total of Sh327 billion; while phase 2A – from Nairobi to Naivasha (120km) is being funded to the tune of Sh150 billion.
On the other hand, phase 2B of the new railway – from Naivasha to Kisumu (270km) is set to cost Sh370 billion; while phase 2C, a 107km extension from Kisumu to Malaba, is expected to consume Sh131 billion.
The Mombasa-Nairobi standard gauge railway is now 100 per cent complete and awaiting its official inauguration by President Uhuru Kenyatta next week.
On the other hand the second phase of the project, which is funded by the Exim Bank of China, is under construction – and Kenya is now in talks with the Chinese lender to extend financing for phase 2B of the project.
“The formal request will undergo normal procedure of approval and Premier Li (Keqiang) has promised to give it the adequate consideration and urgency it deserves,” State House Spokesman Manoah Esipisu told journalists in Beijing last week, where President Kenyatta was attending the Belt and Road summit.
By comparison, phase two of the standard gauge railway will cost Sh1.37 billion per kilometre, nearly twice the Sh693 million per kilometre rate for the Mombasa-Nairobi railway.
Transport secretary James Macharia had earlier said that the second leg of the project will be expensive mainly due to the rugged terrain of the Rift Valley escarpments.
“This will make the second phase of construction very expensive because of the many tunnels that will be required in order to connect between the escarpments,” he said.
The twenty or so tunnels between Nairobi and Naivasha, for example, will cover 23 per cent of the total distance and are estimated to cost Sh18.2 billion.
With Chinese loans to the standard gauge railway expected to cross the Sh1 trillion mark, considering the interest rate charges, economists have criticised the project for creating a huge national debt.
Kenya’s public debt now stands at Sh4 trillion, meaning the standard gauge railway project commands a quarter of the total national loan.
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