For first three years I don't see the alarm.i don't think we expected to break even in 3yrs
RV , you know what they are trying to do, one of the only few success storiy of Uhuru , which was achieved in Jubilee I . After having achieved nothing in Jubilee II due to Handshake/Raila Dynamics they are trying to soil SGR . The primary objective of SGR was not making profits .
The operation loss has already caused the Kenya Railways Company (KRC) to default on an estimated Sh40 billion payout to China’s Africa Star Railway Operation Company, which runs both passenger and cargo services on the SGR.
RV , you know what they are trying to do, one of the only few success storiy of Uhuru , which was achieved in Jubilee I . After having achieved nothing in Jubilee II due to Handshake/Raila Dynamics they are trying to soil SGR . The primary objective of SGR was not making profits .
Infrastructure projects are never built to make profits if they are state funded. What should make us panic is the following sentence:QuoteThe operation loss has already caused the Kenya Railways Company (KRC) to default on an estimated Sh40 billion payout to China’s Africa Star Railway Operation Company, which runs both passenger and cargo services on the SGR.RV , you know what they are trying to do, one of the only few success storiy of Uhuru , which was achieved in Jubilee I . After having achieved nothing in Jubilee II due to Handshake/Raila Dynamics they are trying to soil SGR . The primary objective of SGR was not making profits .
Precisely. Jubilee did great to pull such a project on time and budet. Now I don't think anybody expect it to break even the first few years of operation. I think earliest projection was to break even in 10yrs. As long as it break even - can maintain itself and operate - we don't need it to turn profit. The profit is the comfort thousands enjoy on their journey to Mombasa, the less road accidents, less headache of goods transport, the less congestion in mombasa port.
Public projects are non-profit making.
Nobody has ever asked if road xyz is turning profit.
Why should we ask if a railway is turning profit.
This is a service gov provides - like water, public transport - as lon as it maintained - it meet it's objective.
Kplc is private company and we need it healthy
SGR is a commercial enterprise, its suppose to make money. A toll road would be comparable to SGR. SGR at the very least should be cash flow positive i.e it should be self sustaining. Without government support the SGR would collapse, even after government mandate to use it, it still can't service its loans. Kenya pipeline, Kenya ports and KAA are all profitable owned by government.
There's tacit effort to sanitize Jubilee 1st term when all the decisions that have adversely affected the economy were made. From SGR, medical, Turkana oil, Gulana, universal electricity connections, misappropriation of Euro bonds etc.
The projects that were undertaken haven't resulted in increased economic activity that would result in increased tax revenue. Other than the initial tick in GDP e.g SGR increased G.D.P by an estimate of 1.5% during construction.
?s=19@JKNjenga am here to report that Procurement of the said property is complete. Details are ready online for public to audit.
— Paul (@KangetheWakanya) September 11, 2020
Thank you owners for cooperation.
Road to Shanghai is real @SenMutula @ledamalekina @johnnjenga @KirwaDavies pic.twitter.com/gvl1pxuLHM
Chinese police in town ready to start taking over?s=19@JKNjenga am here to report that Procurement of the said property is complete. Details are ready online for public to audit.
— Paul (@KangetheWakanya) September 11, 2020
Thank you owners for cooperation.
Road to Shanghai is real @SenMutula @ledamalekina @johnnjenga @KirwaDavies pic.twitter.com/gvl1pxuLHM
SGR is kenya biggest infr investment - and is long term. Once you guys understand that - we will be somewhere. The first year it made I think about 50M dollars out of 110M running expenses - so majority of this 200M dollars - was from initial year - and I think next year - it's doubled it's revenues to about 100M - and before COVID-19 - it was well on it's way to about 130M - so you can see it's not doing badly - and yet it has so many teething problems - around congestion at inland deports, last mile issues, double billing by KPA and KRA, name it. Good thing - Uhuru has now combined all these bodies - so hopefully they can offer total solution.SGR is the Kenya's biggest infrastructure investment and also the worst. You can prorate cost of SGR for a million years and still it can't repay itself without taxpayers money. At the very basic SGR isn't cash flow neutral i.e cover operation cost and pay debt. The only reason northern corridor is cheaper than TZ is cause freight cost is being subsidized by taxpayers. And this is in addition to 1.5% tax on imports, plus regulator sets the price not the market https://www.businessdailyafrica.com/news/Slash-cost-of-moving-cargo-via-SGR/539546-5372318-ec5twkz/index.html .
If there is an advantage from SGR - it's made trucks to lower their costs of transport- you should compare cost of northern corrindor with TZ central corridor - and you can see huge savings we are making.
I believe in few years - SGR will be able to meet it's ORM - but repaying the loan will be the challenge - maybe in 10yrs - taxpayers can take a break from repaying SGR.
Jubilee 1.0 verdict was on 22nd August 2017. It won by improving it's 2013 - by whooping 5%.