Standard Gauge Railway Puts Kenya in deep Debt

By Amina Faki

The long awaited completion of the Standard Gauge Railway (SGR) was on 31^st May 2017 brought to an end with the President Uhuru Kenyatta launching the Madaraka Express.

During the launch the first train left from Mombasa to Nairobi in just four and half an hour per say.

According to the feasibility study, the SGR will reduce transport costs, compared to road transport, especially as volumes increases.

Speaking on the day of the launch in Mombasa, Government Spokesman Erick Kiraithe said the SGR will boost the Kenyan shilling against the US dollar. Currently, one US dollar is equivalent to 103 shillings, Mr. Kiraithe said that the SGR project will significantly reduce the gap.

“The Kenyan shilling to the dollar will certainly improve. This will be an improvement which will run up to 50 to 100 years. It’s not an issue of what happens next week and the other week,” he told the press conference at Travelers Beach Hotel.

He also added that the SGR will improve the gross domestic product (GDP) within a short period of time.

With the launch of the Madaraka Express, there are promises in the near future to link the country’s in the East African region to enhance prosperity.

Standard Gauge Railway is one of the major milestones Kenya has celebrated since independence, costing 3.2 billion dollars, a loan from China.

President Uhuru Kenyatta during the launch said the rail line signals a new chapter in the country’s history. He added that in the near future the comfy and modern Standard Gauge Railway will link Kenya with its neighbor South Sudan, DRC, Uganda, Burundi, and Ethiopia.

The SGR is an issue that raises so many concerns with different opinions from people; from the claims of corruption to the bit that the newly launched railway will enhance growth in the country and that of the GDP by 1.5 percent.

Even with many looking at the promising benefits of the new launched Madaraka Express, some still wonder about the SGR China debt staring ragingly at the country.

Kenya is choking on debts from China; the Business Daily wrote that Kenya was awarded 294.3 billion shillings which account for 90 percent of the 327 billion shillings spent on constructing Mombasa-Nairobi SGR line.

China is also financing 90 percent of the 150 billion shillings on the Nairobi-Naivasha section and has been approached for an additional 370 billion shillings for the Naivasha-Kisumu line.

Will the SGR project be able to give back the money since it’s the largest infrastructural project in the country?

Buses plying the route spend nearly seven hours to shuttle between Nairobi and Mombasa. Does this mean the end of road transportation for the matatu business?