SGR is working - but until we get export good - still expensive

[RV Pundit]

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According to the East Africa Logistics Survey, the average cost of transporting a 40-foot container from Mombasa to Nairobi dropped to $1,000 last year from a high of $ 1,300 in 2011, while that from Mombasa to Kampala came down to $2,500 from $3,400 in the same period.

This is, however, lower compared to the Central Corridor mainly served by the Port of Dar es Salaam, where rates recorded a marginal increase. This places Mombasa as the cheapest entry point for goods into the region.

SCEA data shows the transport cost from Dar es Salaam to Kampala has increased from $2,507 in 2011 to $4,500 last year, making Northern Corridor the better choice for Uganda.

[KenyanPlato]

Even with freight monopoly  this one will never work. Waste fof money. Uhuru could have built a dual carriage highway from nairobi to busia with that kind of money sgr wasted. Without heavy manufacturing rail cargo cannot sustain a railway line. In us the bulk of cargo is for manufacturing and oil refining

[Arcadian_Dreamer]

Even with freight monopoly  this one will never work. Waste fof money. Uhuru could have built a dual carriage highway from nairobi to busia with that kind of money sgr wasted. Without heavy manufacturing rail cargo cannot sustain a railway line. In us the bulk of cargo is for manufacturing and oil refining

SGR cheerleaders keep getting proven wrong but they insist success is right around the corner every time, for how long will they keep up the self deception? They are too emotionally vested for them to be honest about it. There is no reason to, call a spade a spade. We won't think any less of you because you got it wrong.

[patel]

Precisely, we have beaten that horse to a pulp. SGR is a white elephant, looks good but it's a money pit. Superhighway would have generated more economic output at a very low cost. 1000km that's roughly 750 miles. At average 80mph that's less than 10 hrs distance. Mwafrika bure kabisa.

Even with freight monopoly  this one will never work. Waste fof money. Uhuru could have built a dual carriage highway from nairobi to busia with that kind of money sgr wasted. Without heavy manufacturing rail cargo cannot sustain a railway line. In us the bulk of cargo is for manufacturing and oil refining

ote author=KenyanPlato link=topic=8644.msg77229#msg77229 date=1596056267]
Even with freight monopoly  this one will never work. Waste fof money. Uhuru could have built a dual carriage highway from nairobi to busia with that kind of money sgr wasted. Without heavy manufacturing rail cargo cannot sustain a railway line. In us the bulk of cargo is for manufacturing and oil refining
[/quote]

[RV Pundit]

But can heavy manufacturing and minning happen without the rail. Man, if Brits, could finance a railway in Kenya in 1890...surely we can do this. Yes SGR is not competitive with trucks on containaired cargo...but unconventional cargo...they are the best. We will get there....soon..and this railway will repaid in 50yrs.

As for dual highway from Mombasa to Busia - this should be a top priority too.

Even with freight monopoly  this one will never work. Waste fof money. Uhuru could have built a dual carriage highway from nairobi to busia with that kind of money sgr wasted. Without heavy manufacturing rail cargo cannot sustain a railway line. In us the bulk of cargo is for manufacturing and oil refining

[RV Pundit]

You're looking at SGR from a narrow view. Look this SGR will be here in 100yrs from now and you'll look very stupid. Look at old British railway and what it did for that corrindor. Nairobi began as a railway station.

SGR cheerleaders keep getting proven wrong but they insist success is right around the corner every time, for how long will they keep up the self deception? They are too emotionally vested for them to be honest about it. There is no reason to, call a spade a spade. We won't think any less of you because you got it wrong.

[Kadudu]

SGR was a noble idea, but as usual poorly planned, poorly negotiated, built and run to expensiv. Our leaders had only their pockets in mind. No wonder even the generous Chinese not ready to finance the extension to Kisumu.

[RV Pundit]

They ate 10% - project managament fee - but SGR was well executed - such huge project delivered on time and cost is crazy. Actually it was delivered ahead of schedule. So the 10% Wanjohi took is justified - the man was supervising it daily.

SGR began operation in 2018 and we want it to be profitable. The loan will be paid in fully in 2070. Why the hurry.

As for Kisumu - Kenya and Uganda and China - need to agree on who will fund - kisumu-malaba section. That I think is biggest problem now. Kenya don't see the need to go beyond Kisumu. China will not commit unless Uganda also commit. Kenya wants chinese to fund Malaba - Kisumu.

But in the meantime I see Wanjohi is doing well rehabilitating the old railway. Ruto will come and complete SGR.

SGR was a noble idea, but as usual poorly planned, poorly negotiated, built and run to expensiv. Our leaders had only their pockets in mind. No wonder even the generous Chinese not ready to finance the extension to Kisumu.

[Kadudu]

That 10% Wanjohi pocketed is nothing compared to the 30-40% Kenyans were overcharged by the Chinese. The whole project was not even tendered. Single sourcing from feasibilty sudies, planning, construction and now even the running of the whole project.
Also note that Kenyan companies contributed a minimal to the whole infrastructure project. So today after completion Kenya alone is not even in a position to build 1 km of a railway line. It is technology transfer that matters. Without it, the whole project just does not make sense. even those train stations, no Kenyan architect contributed even 1%. Atleast the government should have put some limitations and allowed local companies and organisations to take part. I hear the local part was put at minimum 30% and the Chinese just ignored that clause of the contract. Of course Wanjohi na wakora wakee looked the other way.

They ate 10% - project managament fee - but SGR was well executed - such huge project delivered on time and cost is crazy. Actually it was delivered ahead of schedule. So the 10% Wanjohi took is justified - the man was supervising it daily.

SGR began operation in 2018 and we want it to be profitable. The loan will be paid in fully in 2070. Why the hurry.

As for Kisumu - Kenya and Uganda and China - need to agree on who will fund - kisumu-malaba section. That I think is biggest problem now. Kenya don't see the need to go beyond Kisumu. China will not commit unless Uganda also commit. Kenya wants chinese to fund Malaba - Kisumu.

But in the meantime I see Wanjohi is doing well rehabilitating the old railway. Ruto will come and complete SGR.

[RV Pundit]

Our problem is not lack of skills - it corruption and poor work ethic. Chinese are hard workers. If kenya contractors were to be half as serious - they would be getting contracts to build roads, rails and etc.

That 10% Wanjohi pocketed is nothing compared to the 30-40% Kenyans were overcharged by the Chinese. The whole project was not even tendered. Single sourcing from feasibilty sudies, planning, construction and now even the running of the whole project.
Also note that Kenyan companies contributed a minimal to the whole infrastructure project. So today after completion Kenya alone is not even in a position to build 1 km of a railway line. It is technology transfer that matters. Without it, the whole project just does not make sense. even those train stations, no Kenyan architect contributed even 1%. Atleast the government should have put some limitations and allowed local companies and organisations to take part. I hear the local part was put at minimum 30% and the Chinese just ignored that clause of the contract. Of course Wanjohi na wakora wakee looked the other way.

They ate 10% - project managament fee - but SGR was well executed - such huge project delivered on time and cost is crazy. Actually it was delivered ahead of schedule. So the 10% Wanjohi took is justified - the man was supervising it daily.

SGR began operation in 2018 and we want it to be profitable. The loan will be paid in fully in 2070. Why the hurry.

As for Kisumu - Kenya and Uganda and China - need to agree on who will fund - kisumu-malaba section. That I think is biggest problem now. Kenya don't see the need to go beyond Kisumu. China will not commit unless Uganda also commit. Kenya wants chinese to fund Malaba - Kisumu.

But in the meantime I see Wanjohi is doing well rehabilitating the old railway. Ruto will come and complete SGR.

[Arcadian_Dreamer]

SGR was a noble idea, but as usual poorly planned, poorly negotiated, built and run to expensiv. Our leaders had only their pockets in mind. No wonder even the generous Chinese not ready to finance the extension to Kisumu.

You call CCP conceived idea noble?

Kenyans are not critical thinkers. You guys need your head checked seriously. HOw many times has it been written that the whole thing was dreamt up by chinese state for capturing hapless countries in debt trap.

[RV Pundit]

How much critical thinking did you expend to read that western inspired propaganda.

You call CCP conceived idea noble?

Kenyans are not critical thinkers. You guys need your head checked seriously. HOw many times has it been written that the whole thing was dreamt up by chinese state for capturing hapless countries in debt trap.

[mankind]

 
  Pundit stop preaching to a choir. I found a more sober debate on the same from  informed folks. I stole some of their discussion below. Courtesy of Skyscrappercity.com

   Mwendo Safi
Registered
Joined Feb 28, 2017
311 Posts
#10,469 • 14 d ago
Aaraldi said:
^^in 1870 Sweden spend 90% of its national budget on constructing its two mainlines. The problem with SGR isn't that it isn't economically beneficial but it was sold by leading politicians who didn't really understand its prospects as something that will "pay for itself". Public infrastructure doesn't has to "pay for itself" otherwise there would be no rural electrification or sanitation it's acting as an economic enabler. Does SGR get the balance from the health budget and insurance companies by reducing deaths on Mombasa-Nairobi highway by over a hundred each year? How much do importers based in Nairobi pay SGR for cutting out the middle man between them and international shipping companies? Would there be the same commitment by companies to invest in Naivasha Industrial Park if it wasn't directly connected to the world by a dryport? Does KeNHA pay SGR for reducing truck traffic on its most strained road gobbling up billions in maintenance every year? (A single truck causes as much wear and tear as 70,000 cars).

The economic benefits of infrastructure increases overtime and as Kenya grows the actual burden decreases relativity speaking by every year. Kenya's nominal GDP was $50 billion when it started to construct SGR, it's is now over $100 billion. Every year the $200-300 million Kenya pays in idebt service takes up a smaller and smaller proportion of the overall GDP and foreign currency commitments.
Public infrastructure like roads, sewage systems, educational facilities, military barracks, irrigation systems etc are social goods, they are not meant to generate profit in itself but are enablers of economic and social transformations. No one has ever talked about how Thika road will repay itself. Therefore I agree SGR was wrongly promoted as a business investment that should generate a profit while in the real sense, SGR is just an enabler of efficiency in cargo and passenger movements.
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Ukweli
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Joined Apr 2, 2019
39 Posts
#10,470 • 14 d ago
Mwendo Safi said:
Public infrastructure like roads, sewage systems, educational facilities, military barracks, irrigation systems etc are social goods, they are not meant to generate profit in itself but are enablers of economic and social transformations. No one has ever talked about how Thika road will repay itself. Therefore I agree SGR was wrongly promoted as a business investment that should generate a profit while in the real sense, SGR is just an enabler of efficiency in cargo and passenger movements.
SGR was never designed as a business. Otherwise the Railway Development Levy would not have been introduced.
But listening to the naysayers about it not covering the loan you hold your chin at stupidity of such comments.
As we sleek, the American system has been allocated $25 billion, in Covid money, over and above annual subsidies of Federal Funding. Amtrak, yes the famous American icon gets $1 billion as well. This is owing to the fact Amtrak's revenue barely touches 50% of Operational Costs.
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abckris
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Joined Feb 28, 2010
5,969 Posts
#10,471 • 13 d ago
^^All true points. There’s actually a way to estimate the shilling value of public projects. Economic value is actually estimable (Is that a word? I think so). For economic evaluation of public projects they use things like number of lives saved (they have economic value of each life for each age group — don’t freak out, I know it sounds strange to equate a life to some monetary value), time saved by a traveler using the road compared to no intervention, improvement in economic activities that can be directly associated with the project, and things like that. In terms of these estimates these projects are seen to be profitable or not but they end up being profitable to the society not in direct monetary terms. For example the MTA in New York that runs the metro system prides in running the economy of New York City (approximately 8% of US GDP), that’s pretty significant and for that reason lots of taxes are gained by the state and federal governments, far exceeding the cost of subsidies and sustenance finances needed to keep the MTA going. Similarly, public health projects are measured by the benefits of a healthy workforce, also a healthy population spends less in healthcare. Generally doing these estimates require a lot of stats and assumptions but they give you more objective empirical values for decision support, as to what’s beneficial to society vs a white elephant.

[RV Pundit]

I need to join that Skycrappercity. This forum is mostly low IQ - folks who cannot see beyond their nose- actually they have no nose - they already cut it  nose to spit their face.

 
  Pundit stop preaching to a choir. I found a more sober debate on the same from  informed folks. I stole some of their discussion below. Courtesy of Skyscrappercity.com

   Mwendo Safi
Registered
Joined Feb 28, 2017
311 Posts
#10,469 • 14 d ago
Aaraldi said:
^^in 1870 Sweden spend 90% of its national budget on constructing its two mainlines. The problem with SGR isn't that it isn't economically beneficial but it was sold by leading politicians who didn't really understand its prospects as something that will "pay for itself". Public infrastructure doesn't has to "pay for itself" otherwise there would be no rural electrification or sanitation it's acting as an economic enabler. Does SGR get the balance from the health budget and insurance companies by reducing deaths on Mombasa-Nairobi highway by over a hundred each year? How much do importers based in Nairobi pay SGR for cutting out the middle man between them and international shipping companies? Would there be the same commitment by companies to invest in Naivasha Industrial Park if it wasn't directly connected to the world by a dryport? Does KeNHA pay SGR for reducing truck traffic on its most strained road gobbling up billions in maintenance every year? (A single truck causes as much wear and tear as 70,000 cars).

The economic benefits of infrastructure increases overtime and as Kenya grows the actual burden decreases relativity speaking by every year. Kenya's nominal GDP was $50 billion when it started to construct SGR, it's is now over $100 billion. Every year the $200-300 million Kenya pays in idebt service takes up a smaller and smaller proportion of the overall GDP and foreign currency commitments.
Public infrastructure like roads, sewage systems, educational facilities, military barracks, irrigation systems etc are social goods, they are not meant to generate profit in itself but are enablers of economic and social transformations. No one has ever talked about how Thika road will repay itself. Therefore I agree SGR was wrongly promoted as a business investment that should generate a profit while in the real sense, SGR is just an enabler of efficiency in cargo and passenger movements.
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Ukweli
Registered
Joined Apr 2, 2019
39 Posts
#10,470 • 14 d ago
Mwendo Safi said:
Public infrastructure like roads, sewage systems, educational facilities, military barracks, irrigation systems etc are social goods, they are not meant to generate profit in itself but are enablers of economic and social transformations. No one has ever talked about how Thika road will repay itself. Therefore I agree SGR was wrongly promoted as a business investment that should generate a profit while in the real sense, SGR is just an enabler of efficiency in cargo and passenger movements.
SGR was never designed as a business. Otherwise the Railway Development Levy would not have been introduced.
But listening to the naysayers about it not covering the loan you hold your chin at stupidity of such comments.
As we sleek, the American system has been allocated $25 billion, in Covid money, over and above annual subsidies of Federal Funding. Amtrak, yes the famous American icon gets $1 billion as well. This is owing to the fact Amtrak's revenue barely touches 50% of Operational Costs.
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abckris
Registered
Joined Feb 28, 2010
5,969 Posts
#10,471 • 13 d ago
^^All true points. There’s actually a way to estimate the shilling value of public projects. Economic value is actually estimable (Is that a word? I think so). For economic evaluation of public projects they use things like number of lives saved (they have economic value of each life for each age group — don’t freak out, I know it sounds strange to equate a life to some monetary value), time saved by a traveler using the road compared to no intervention, improvement in economic activities that can be directly associated with the project, and things like that. In terms of these estimates these projects are seen to be profitable or not but they end up being profitable to the society not in direct monetary terms. For example the MTA in New York that runs the metro system prides in running the economy of New York City (approximately 8% of US GDP), that’s pretty significant and for that reason lots of taxes are gained by the state and federal governments, far exceeding the cost of subsidies and sustenance finances needed to keep the MTA going. Similarly, public health projects are measured by the benefits of a healthy workforce, also a healthy population spends less in healthcare. Generally doing these estimates require a lot of stats and assumptions but they give you more objective empirical values for decision support, as to what’s beneficial to society vs a white elephant.

[Kadudu]

Just quit and join the high IQ forum and leave us the low IQs to continue with our journey.

Also this is just a section of the discussion in that forum. It cannot be generalised.

BTW, they contributors in that forum have many good points, but I ask myself, why did the Chinese insist on a business model in order to give a loan for the extension of the SGR to Kisumu/Malaba? I have always insisted, infrastructure is not only about profit making, but a lot has to do with creating jobs for the locals and also promoting the local industry. We failed in the latter while building the SGR. Even till today the Chinese still drive the SGR trains, although locals were trained to do the same. If KQ has local pilots, why can Kenyans not drive trains which by the way only move at 120 kph? Is it nuclear science?

I need to join that Skycrappercity. This forum is mostly low IQ - folks who cannot see beyond their nose- actually they have no nose - they already cut it  nose to spit their face.

[RV Pundit]

Chinese don't go hawking loans.
Kenya took itself to China and asked for loan from EXIM bank of China.
China asked them to conduct a feasibility study.
They looked at the numbers - and they were not very happy
Like any bank if you insist to go ahead  - they asked for security.
Chinese asked that KPA guarantees that it will provide the projected cargo traffic (40%) or pay for it.
Kenyans including corrupt politician are in love with chinese because they deliver. 
Good politicians want to eat and deliver.
They  know if you eat everything Moi style and deliver nothing you'll become unpopular.
It will be sometimes until we see return on Kenya contractors on LARGE PROJECT.
There is corruption and lack of capacity problem. Let them do small projects that don't require capital, machinery and equipments.

The other stuff - local building capacity was done - including funding of Kenya Railway Institute and sending many Kenyans to China.
I believe now Kenyans are understudying the Chinese.

Honestly I would like the Chinese to remain LONGER.

Let not rush to kick our experts like we did in 1960s.

Unlike colonial powers - we are inviting Chinese on our own terms and volition.

People don't care about the colour - Michale Joseph is celebrated for performance.

Best run companies in Kenya have mix of international expertise and local talent. International expertise really help broaden the vision and also curb kenya short termism - looting something to the ground.
 

Just quit and join the high IQ forum and leave us the low IQs to continue with our journey.

Also this is just a section of the discussion in that forum. It cannot be generalised.

BTW, they contributors in that forum have many good points, but I ask myself, why did the Chinese insist on a business model in order to give a loan for the extension of the SGR to Kisumu/Malaba? I have always insisted, infrastructure is not only about profit making, but a lot has to do with creating jobs for the locals and also promoting the local industry. We failed in the latter while building the SGR. Even till today the Chinese still drive the SGR trains, although locals were trained to do the same. If KQ has local pilots, why can Kenyans not drive trains which by the way only move at 120 kph? Is it nuclear science?

I need to join that Skycrappercity. This forum is mostly low IQ - folks who cannot see beyond their nose- actually they have no nose - they already cut it  nose to spit their face.

[Kadudu]

Not entirely true. Recently we saw how illegal Chinese immigrants were caught on video caning their Kenyan workers. Had they not been filmed, the fellows would still be illegally in Kenya today. What is the number of illegal Chinese immigrants in Kenya today?

Chinese don't go hawking loans.
Kenya took itself to China and asked for loan from EXIM bank of China.
China asked them to conduct a feasibility study.
They looked at the numbers - and they were not very happy
Like any bank if you insist to go ahead  - they asked for security.
Chinese asked that KPA guarantees that it will provide the projected cargo traffic (40%) or pay for it.
Kenyans including corrupt politician are in love with chinese because they deliver. 
Good politicians want to eat and deliver.
They  know if you eat everything Moi style and deliver nothing you'll become unpopular.
It will be sometimes until we see return on Kenya contractors on LARGE PROJECT.
There is corruption and lack of capacity problem. Let them do small projects that don't require capital, machinery and equipments.

The other stuff - local building capacity was done - including funding of Kenya Railway Institute and sending many Kenyans to China.
I believe now Kenyans are understudying the Chinese.

Honestly I would like the Chinese to remain LONGER.

Let not rush to kick our experts like we did in 1960s.

Unlike colonial powers - we are inviting Chinese on our own terms and volition.

People don't care about the colour - Michale Joseph is celebrated for performance.

Best run companies in Kenya have mix of international expertise and local talent. International expertise really help broaden the vision and also curb kenya short termism - looting something to the ground.

[Nowayhaha]

Even with freight monopoly  this one will never work. Waste fof money. Uhuru could have built a dual carriage highway from nairobi to busia with that kind of money sgr wasted. Without heavy manufacturing rail cargo cannot sustain a railway line. In us the bulk of cargo is for manufacturing and oil refining

SGR cheerleaders keep getting proven wrong but they insist success is right around the corner every time, for how long will they keep up the self deception? They are too emotionally vested for them to be honest about it. There is no reason to, call a spade a spade. We won't think any less of you because you got it wrong.

This is false U.S is a continent ,Kenya is a country.meaning transporting goods from Carlifonia to Washington nil income for the federal government however transporting Goods from Kenya to Uganda ,Kenyan government earns alot.
Secondly Kenya is a dwveloping country where as U.S. is developd country. Meaning teansport of good and people is not comparable   ive taken a flight feom Los Angeles to Vegas and Back very cheap in U.S standards same cannot be compared with Kenyan standards a flight from Mombasa to Nairobi snd back it would be a salary for a household with SGR its very affordable and I can tell you for free Mombasa Nairobi road is a nightmare  and thanks to SGR families can now travel horror free between Mombasa and Naitobi.