KSh16 billion was all that Kenya needed to construct a well-functioning standard gauge railway (SGR), a British magazine has claimed. According to an article published by The Economist, the money would have been enough to upgrade the old railway into an SGR, which would have been as good as the one currently under construction.
This would have spared the taxpayer a whopping Sh311 billion, enough to fund all the 47 counties. Kenya negotiated for a Sh327 billion bilateral loan from China for the project. In what is likely to inflame passions, the article seems to conclude that Kenya’s future generations will shoulder the burden of repaying the Sh327 billion debt, which could have been avoided.
The Government projects that, once it starts operating, the SGR will increase the country’s Gross Domestic Product (GDP) by 1.5 per cent, from savings made from cheap transport cost and efficiency in ferrying increased cargo volume. However, in a hard-hitting article The Economist disagrees that Kenya will reap such benefits. The article goes on to state Kenyans will be paying dearly for the loan for what is basically a “third-rate railway.” According to the article, “Africa Railways Risks the way of the Old Ones,” the new railway which left a massive hole in the country’s accounts is no better than the old one built by the British more than a century ago. If anything, the Government could have paid far less and probably funded it from internally generated revenue, says the article.