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SGR officially dead. What next?
Rank: Veteran Joined: 11/13/2015 Posts: 1,654
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Obi 1 Kanobi wrote:Ericsson wrote:Obi 1 Kanobi wrote:I always wonder why people fear large projects. They should have taken this SGR all the way to Kampala atleast and possibly Rwanda. Every added mile means more cargo to/from Mombasa, hence faster pay off period.
China at one time were building 6,000 miles of highway annually. And the sheer size of the OBOR should inspire Africans to dream surely. The road between China and pakistan through the Himalaya's is jaw dropping.
We need to take risks, ama we shall perish with our midget projects that cannot exploit our vast resources fully. What about the debt burden and economic viability 100 years ago, some random white guys came to Kenya and immediately saw the economic viability of building a railway line from Mombasa to western Uganda, why can't we see the same. Its a chicken and eggs situation but its been proven over and over that go-to market strategy is as important as production, so good reliable, cheap transport and distribution networks are as important in extracting utility of a product or an economy. The corruption, looting and theft is very disturbing and I want to argue for the SGR at its true price, we shuould be fighting to have it built at its true costs and not abandoned because someone will steal half the cost.  Lunatic express was not viable. It was an imperialist race to the bottom. It's purpose was domination to control the source of River nile and ultimately control the downstream countries. Sir Charles Elliot even wondered why it was built in the first place. There were no minerals or commodities to transport back to the sea. The 5m pounds could have done more wonders.
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Rank: Member Joined: 1/18/2019 Posts: 185 Location: kenya
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Obi 1 Kanobi wrote:Ericsson wrote:Obi 1 Kanobi wrote:I always wonder why people fear large projects. They should have taken this SGR all the way to Kampala atleast and possibly Rwanda. Every added mile means more cargo to/from Mombasa, hence faster pay off period.
China at one time were building 6,000 miles of highway annually. And the sheer size of the OBOR should inspire Africans to dream surely. The road between China and pakistan through the Himalaya's is jaw dropping.
We need to take risks, ama we shall perish with our midget projects that cannot exploit our vast resources fully. What about the debt burden and economic viability 100 years ago, some random white guys came to Kenya and immediately saw the economic viability of building a railway line from Mombasa to western Uganda, why can't we see the same. Its a chicken and eggs situation but its been proven over and over that go-to market strategy is as important as production, so good reliable, cheap transport and distribution networks are as important in extracting utility of a product or an economy. The corruption, looting and theft is very disturbing and I want to argue for the SGR at its true price, we shuould be fighting to have it built at its true costs and not abandoned because someone will steal half the cost. That first paragraph was hilarious There is a reason it is called the Lunatic line.
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Rank: Veteran Joined: 11/13/2015 Posts: 1,654
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Sunk-cost fallacy- Reasoning that further investment is warranted on the fact that the resources already invested will be lost otherwise, not taking into consideration the overall losses involved in the further investment.
E.g. investing in KQ shares then management goes on shopping spree then forcing banks to convert loans into equity then taking over JKIA, then more rights issue to salvage the investment.
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Rank: Elder Joined: 12/7/2012 Posts: 11,935
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You guys are treating public investments like private investments, widen the scope of the benefits SGR has brought to Kenya - social returns in plenty already exist. Hii ni mali ya umma, sio ya ubinafsi!!! In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Elder Joined: 7/23/2008 Posts: 3,017
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wukan wrote:Obi 1 Kanobi wrote:Ericsson wrote:Obi 1 Kanobi wrote:I always wonder why people fear large projects. They should have taken this SGR all the way to Kampala atleast and possibly Rwanda. Every added mile means more cargo to/from Mombasa, hence faster pay off period.
China at one time were building 6,000 miles of highway annually. And the sheer size of the OBOR should inspire Africans to dream surely. The road between China and pakistan through the Himalaya's is jaw dropping.
We need to take risks, ama we shall perish with our midget projects that cannot exploit our vast resources fully. What about the debt burden and economic viability 100 years ago, some random white guys came to Kenya and immediately saw the economic viability of building a railway line from Mombasa to western Uganda, why can't we see the same. Its a chicken and eggs situation but its been proven over and over that go-to market strategy is as important as production, so good reliable, cheap transport and distribution networks are as important in extracting utility of a product or an economy. The corruption, looting and theft is very disturbing and I want to argue for the SGR at its true price, we shuould be fighting to have it built at its true costs and not abandoned because someone will steal half the cost. Lunatic express was not viable. It was an imperialist race to the bottom. It's purpose was domination to control the source of River nile and ultimately control the downstream countries. Sir Charles Elliot even wondered why it was built in the first place. There were no minerals or commodities to transport back to the sea. The 5m pounds could have done more wonders. I have read many opinions suggesting that the OBOR is more for political gain than pure economic value. Government projects cannot be looked at from a pure profit perspective and we all know this. Viability of the railway line has to also factor in other intangible gains like reduced degradation of the roads etc. But importantly for me the selling point is just comparing our transport network with those of other countries we aspire to be like, do that and lets talk viability "The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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Rank: Elder Joined: 12/4/2009 Posts: 10,804 Location: NAIROBI
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Angelica _ann wrote:You guys are treating public investments like private investments, widen the scope of the benefits SGR has brought to Kenya - social returns in plenty already exist. Hii ni mali ya umma, sio ya ubinafsi!!! But tuko na shida ya kulipa hiyo deni Wealth is built through a relatively simple equation Wealth=Income + Investments - Lifestyle
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Rank: Veteran Joined: 11/13/2015 Posts: 1,654
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Obi 1 Kanobi wrote:
I have read many opinions suggesting that the OBOR is more for political gain than pure economic value. Government projects cannot be looked at from a pure profit perspective and we all know this.
Viability of the railway line has to also factor in other intangible gains like reduced degradation of the roads etc.
But importantly for me the selling point is just comparing our transport network with those of other countries we aspire to be like, do that and lets talk viability
Yes I agree with you OBOR is more political than economic. China has been trying to get out of the containment policy imposed by the US. It has succeeded in this respect by breaking out of the south china sea coming over to the Indian ocean. Ultimately it will dominate the Eastern seaboard of Africa and slowly push the US to the Atlantic. Which is why US is offering the Express way to undermine the SGR. There goes your argument on degradation of the roads. If 60% of the Cargo is terminating in Nairobi there was no need to go beyond Nairobi as most of the containers are shipping out empty. Comparing our transport network to those we aspire to be like is the wrong approach, are we going to get bullet trains too? Our economy will not produce cargo to utilize SGR capacity for another 40-50 years. It's a terrible mistake to commit 20% of your GDP to one project.
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Rank: Chief Joined: 1/3/2007 Posts: 18,346 Location: Nairobi
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murchr wrote:Calm down its not dead prophet of doom. Well, one could argue neither is KQ dead as long as it is subsidized. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 1/18/2019 Posts: 185 Location: kenya
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Angelica _ann wrote:You guys are treating public investments like private investments, widen the scope of the benefits SGR has brought to Kenya - social returns in plenty already exist. Hii ni mali ya umma, sio ya ubinafsi!!! Please state the benefits. All projects should have a return on investment, especially projects of this scale. These don't have to be quantified by monetary terms but can be modelled economically. If this project was really viable a feasibility study would have been done BEFORE the project outlining all these. A feasibility study was technically done but it's never been made public. Ndii shared a page from it which had unrealistic projections and is why I question the viability. It is expensive debt and if a project cannot service it's debt especially if it was mooted in it's ability to repay it's debt we have a right to be very worried. This cost will be borne at the expense of healthcare, education and the likes. Finally, read the feasibility study on Thika Superhighway and see it's cost benefit analysis. Good day.
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Rank: Chief Joined: 1/3/2007 Posts: 18,346 Location: Nairobi
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Impunity wrote:If they can refurbish the MGR to Kisumu, it can just work very well...moving cargo at 60km/h is internationally accepted. Passengers who want to go fast to Kisumu can use KQ. Ndii and Wa Ngugi talked of an Enhanced MGR that could manage more cargo and had faster speeds compared to the current MGR railway. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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SGR officially dead. What next?
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