SGR’s Sh1bn grass

[RV Kirgit]

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The beautiful grass dotting the Standard Gauge Railway (SGR) stations and some sections of the line cost the taxpayer Sh1 billion.

And when Kenyans were fed the narrative that the Chinese contractors were living in temporary containers, the reality was that they were earning top dollar and living large behind the walls of the SGR.

The airtime allowance for the lead engineer was Sh5 million, for the three years the project was under construction. Even if the China Road and Bridge Corporation (CRBC) engineer was on phone 24 hours every day for the 36 months, the airtime would never have been exhausted.

His house was furnished at a cost of Sh3 million and office computers bought at Sh280,000 each, while his laser jet printers cost a staggering Sh513,700 each. In total, the taxpayer forked out Sh57 million to provide office furniture.

https://www.nation.co.ke/nationprime/sgr-china-contractors-kenya/5279428-5467772-hv6mr2/index.html?fbclid=IwAR04lqmt359Qw7Tsiy_pR3uZseuP4dw4ijIMarP75969rQ2T5ezLlmOTQa4

[Kadudu]

SGR is just a chance for Uhuru and his buddies to go for a looting spree.

The second phase to Naivasha is even a bigger scandal. Hardly any anyone is using the train to Ngong or Suswa. It is just not worth it. Big white elephant.

[RV Pundit]

Yes Naivasha one is big elephant - it need to get to Kisumu - even if it mean using local money.

SGR is just a chance for Uhuru and his buddies to go for a looting spree.

The second phase to Naivasha is even a bigger scandal. Hardly any anyone is using the train to Ngong or Suswa. It is just not worth it. Big white elephant.

[Kadudu]

Not in the next 20 years. Going by the amount Tanzania is spending on its SGR, the amount used for Kenya's phase I would have been enough to build the SGR till Malaba and electric, not the vintage diesel that we currently have.

Yes Naivasha one is big elephant - it need to get to Kisumu - even if it mean using local money.

[Garliv]

The problem with SGR is the whole economic rationale of it. Not the profit/loss thinking but much deeper.

1. When a country (Kenya) borrow money from another such cash rarely is deposited into Kenya. It remains there or get into Kenya foreign accounts in London or New York.

2. So when Kenya borrowed money for SGR that cash didn't get into Kenya. It may even have been deposited in some account in China.

3. Now Kenyans hired some Chinese company to build the railway. It paid the Chinese company and deposited that cash into some Chinese account.
4. The Chinese company bought materials needed from another Chinese company/factory. It paid that in China.

5. Then high priced engineers and managers and other professionals were paid with majority of them being deposited in China.

6. So Kenya borrowed money which never came into Kenya but were paid to foreigners out there. And then Kenyans themselves still have to pay the loan!

Anyone notice insanity in all this?

Its insane because IF you have a Kenyan company doing the work, then it will be paid in Kenya. Money will circulate in Kenya. Kenyan company will chiefly buy local materials and import what is necessary. A lot more Kenyans will get jobs. Tax base will expand because the employed will be taxed. The other companies being paid here in Kenya will also be taxed. Then you will have acquisition of skills and development of the same. Therefore the circulation of that cash will stimulate a lot of economical activities. It will be good for the country.

But this is not what happens in Most of African countries. We get screwed because we cannot notice that this economic model is exploitation by others.

Anyone interested in how Africa and others get their economic theory wrong should read Michael Hudson and Paul Craig Roberts.

[Garliv]

SGR was conceived wrongly. Imagine if the so called "normal railway" the 2 Gauge was revitalised and expanded. SGR cash was enough to extend the railway from Nairobi to Namanga, Nairobi to Naivasha and Narok and Kisii.. From Nakuru across Central Kenya to Northern Kenya. And all over.

That in itself would have OPENED UP a lot of business opportunities. It would have connected towns and centres to stimulate movement of goods and services. This is the kind of thinking that stimulate local economies.

SGR from Coast to Nairobi is more of a luxury stuffs. To kufurahisha the elite. To get tourists. It doesn't matter whether it's making "profit or loss" in the business sense, its just another symbol of perpetuating economic inequalities. Of getting to some "big Big projects" without taking care of basics.

[RV Pundit]

SGR from Mombasa-Nairobi is the most viable. Those are two main Kenyan cities. Next would be from Nairobi to Nakuru. But I think Nairobi metro or underground or light rail would be the most viable. But now that we have got to Naivasha...we need to bite the bullet and reach kisumu. Nothing stops us from upgrading the old one.

SGR was conceived wrongly. Imagine if the so called "normal railway" the 2 Gauge was revitalised and expanded. SGR cash was enough to extend the railway from Nairobi to Namanga, Nairobi to Naivasha and Narok and Kisii.. From Nakuru across Central Kenya to Northern Kenya. And all over.

That in itself would have OPENED UP a lot of business opportunities. It would have connected towns and centres to stimulate movement of goods and services. This is the kind of thinking that stimulate local economies.

SGR from Coast to Nairobi is more of a luxury stuffs. To kufurahisha the elite. To get tourists. It doesn't matter whether it's making "profit or loss" in the business sense, its just another symbol of perpetuating economic inequalities. Of getting to some "big Big projects" without taking care of basics.

[Garliv]

Why is Mombasa Nairobi SGR most viable? Because of paying passengers?

My thinking is a  bit different. When British built the Railway the purpose was to get into the interior and extract minerals, get coffee, tea etc and other goodies and then transport them to the port for shipping to the Imperial Capital, London. So SGR is chiefly for what?

And that's why i argue that had Kenya expanded "normal" and open up several other regions and towns, it would have been much better for the country than spend billions for Mombasa Nairobi SGR. Yes, railway transport between Nairobi and Mombasa needed to be revamped but surely spending tens of billions on it and in the process burdening the country with gigantic loans wasn't very bright.

The work of the government should be to provide necessary infrastructure all over and then private business and transport will thrive. Then employment improves. And in the process increase tax base. It doesn't matter whether SGR returns a profit in the business sense. Indeed it may as well run on subsidies if it does actually enable Kenyans do business more or increase movements between towns as that in itself would help in business and social interaction. Kenya should not be seen as a private enterprise.. Primary work of government is offer essential services. After all,major source of income for government is taxation. Therefore find ways and means to increase tax base. t

SGR from Mombasa-Nairobi is the most viable. Those are two main Kenyan cities. Next would be from Nairobi to Nakuru. But I think Nairobi metro or underground or light rail would be the most viable. But now that we have got to Naivasha...we need to bite the bullet and reach kisumu. Nothing stops us from upgrading the old one.

[RV Pundit]

No. Because Mombasa is our main port city. And out of 33M tonnes of cargo docking in Mombasa- about 60% terminate in Nairobi - about 90% pass-through Nairobi. Railways are for heavy cargo - not even containers.Trucks are competitive on containers because they are well standardized and max out at 28 tonnes. Heavy cargo includes cereals (wheat, maize, etc), minerals (coal, iron ore, clinker) - those are profitable to be carried on rail - because you can carry as high as 70 tonnes in one container- without damaging the rail.

NBO-Mombasa will be viable...just a matter of time.

Beyond Nairobi - we need Kampala to commit to use it.

Why is Mombasa Nairobi SGR most viable? Because of paying passengers?

My thinking is a  bit different. When British built the Railway the purpose was to get into the interior and extract minerals, get coffee, tea etc and other goodies and then transport them to the port for shipping to the Imperial Capital, London. So SGR is chiefly for what?

And that's why i argue that had Kenya expanded "normal" and open up several other regions and towns, it would have been much better for the country than spend billions for Mombasa Nairobi SGR. Yes, railway transport between Nairobi and Mombasa needed to be revamped but surely spending tens of billions on it and in the process burdening the country with gigantic loans wasn't very bright.

The work of the government should be to provide necessary infrastructure all over and then private business and transport will thrive. Then employment improves. And in the process increase tax base. It doesn't matter whether SGR returns a profit in the business sense. Indeed it may as well run on subsidies if it does actually enable Kenyans do business more or increase movements between towns as that in itself would help in business and social interaction. Kenya should not be seen as a private enterprise.. Primary work of government is offer essential services. After all,major source of income for government is taxation. Therefore find ways and means to increase tax base. t

SGR from Mombasa-Nairobi is the most viable. Those are two main Kenyan cities. Next would be from Nairobi to Nakuru. But I think Nairobi metro or underground or light rail would be the most viable. But now that we have got to Naivasha...we need to bite the bullet and reach kisumu. Nothing stops us from upgrading the old one.

[Arcadian_Dreamer]

Anyone interested in how Africa and others get their economic theory wrong should read Michael Hudson and Paul Craig Roberts.

What specific books by these two authors would you recommend ?