China Refuses to Fund Construction of SGR Line until Kenya First Proves Its Viability

The Chinese government has reportedly declined to finance the construction of Standard Gauge Railway (SGR) line from Naivasha to Kisumu until Kenya proves its viability.

China is reported to have faulted the project after the Kenyan delegation presented a blueprint of the project during the just-concluded China-Africa Forum (FOCAC) with hopes of securing funding without proving its viability.

In a meeting with his Chinese counterpart Xi Jinping earlier this week, President Kenyatta requested China to give half of the Ksh380 billion that the 267-km stretch will cost as a grant and the remaining amount as a loan.

“All documents are ready. However, when we engaged the Chinese government, it was agreed they do support it, but we need to complete the feasibility study, not just for Naivasha to Kisumu but also all the way from Mombasa to Kisumu so that we can establish its commercial viability,” said Transport Cabinet Secretary James Macharia after the meeting with Chinese officials.

Kenya had already struck a deal with China Communications Construction Company (CCCC) the construction of the stretch.

In its first year of its operation, passenger train Madaraka Express operating on the SGR line between Nairobi and Mombasa raked in Sh1 billion or Sh2.7 million daily. With these figures, the SGR cannot meet its operational costs of Sh1 billion per month.

Some Kenyan economists such as David Ndii have in the past raised questions in the viability of the mega project. “We tried to flag these issues but the government did not organise sufficient public participation and they did not disclose all the factors. These things are only coming to light now,” said Ndii, adding that the project might take another 20 years to pick.

Cargo, which was supposed to be the biggest income earner for SGR has failed to bear results due to continued use of trucks.