The Treasury is seeking approval from the members of parliament (MPs) for 50.6 billion Kenyan Shillings, to complete construction of the second phase of the standard gauge railway (SGR) which will run from Nairobi to Naivasha. It is currently, 90 percent complete.
The request was made via the supplementary budget which the Parliamentary Budget Committee is currently reviewing.
James Macharia, the Transport Cabinet Secretary, said the cash request is for the second leg of the new railway line.
Speaking with Business Daily, Mr. Macharia added that “The 50 billion Kenyan Shillings we are seeking approval from Treasury is for construction of the SGR from Nairobi to Naivasha (phase 2A),”.
The Transport Cabinet Secretary, is also part of a Kenyan delegation in China seeking an additional 370 billion Kenyan Shillings loan from the Chinese, to extend the SGR from Naivasha to Kisumu.
Three years ago, the East African giant (Kenya), signed a financing package for the 120 kilometre extension of the SGR line from Nairobi to Naivasha. Under the said deal, China Eximbank committed to providing a $1.5 billion (150 billion Kenyan Shillings) loan or 85 percent of the required financing, while Kenya was to provide the balance which was an estimated 26.4 billion Kenyan Shillings.
According to Business Daily, On Wednesday April 24th 2019, Mr Macharia did not comment on which share of the financing the Treasury was seeking MPs approval for, he however stated that Parliament nod is also required when releasing loan money for spending.
The Chinese-financed project is the second stage in a scheme that aims at extending SGR to Uganda and other landlocked countries. The goal is to cut the cost of transport and boost trade, by replacing a slower, narrow-gauge railway line.
The Mombasa-Nairobi SGR line started operations in June 2017 and was built at a reported cost of 327 billion Kenyan Shillings with financing from Chinese lenders.
The contractor, China Road and Bridge Corporation, moved to the site 16 months ago and has faced challenges through the construction works.
This includes a court case filed by environmentalists opposed to the line’s passage through the Nairobi National Park and compensation row with landowners.
The contractor is expected to complete the Naivasha SGR line by the end of July 2019.
Kenya is shortly expected to sign a Sh368 billion loan for the construction of the Naivasha to Kisumu leg of the Standard Gauge Railway (SGR), bringing the total debt for the project to 845 billion Kenyan Shillings and making the cost essentially Sh800 million per kilometre — one of the most expensive projects of its kind in the world, as the cost of Sh800 million for every kilometre of railway between Mombasa and Kisumu is twice the international average.
Daily Nation says President Uhuru Kenyatta and Opposition leader Raila Odinga are in China to persuade that country’s leadership to extend the loan.
