[quote=Angelica _ann]Chinese loans for Mombasa to Malaba railway hit Sh1 trillion
Total Chinese loans to Kenya for the construction of the Mombasa to Malaba standard gauge railway will hit the Sh1 trillion mark after Exim Bank of China expressed interest in funding the third phase of the project.
The lender will pump in Sh490 billion to build the railway between Kisumu and Malaba to link Kenya and Uganda, bringing the total cost to Sh1.02 trillion.
This comes at a time when Kenya’s annual debt repayment is set to hit Sh618.5 billion next year, which will see the Treasury spend an estimated Sh40 out of every Sh100 collected from taxpayers on servicing the ballooning loans.
The bill represents a 38.5 per cent jump from Sh446.4 billion spent on public debt this year, compared to projected 12 per cent growth in tax collection; a key indicator of the country’s ability to repay.
The bank is already financing the first leg of the railway from Mombasa to Nairobi at a cost of Sh380 billion with completed work standing at over 90 per cent currently.
The second phase between Nairobi and Naivasha, a stretch of 120 kilometres, will cost Sh150 billion. The higher cost between Nairobi and Naivasha has been attributed to harsh terrain.
As a result, the cost of tunnels will take up 23 per cent of the total cost estimated at Sh18.2 billion. The tunnels will cut through Rift Valley escarpments, making design work more expensive.
Exim Bank will also fund construction of a modern Sh14 billion port on the shores of Lake Victoria in Kisumu as Kenya targets a bigger maritime trade stake with its land locked neighbours.
c&p
Four years ago, the Jubilee administration mesmerised Kenyans with fantastic images of mega-infrastructure, bullet trains and space age airports, iconic stadiums, bewildering interchanges and blooming deserts.
All these were a pretext for an unprecedented borrowing spree, and plunder, plunder that beggars belief.
They borrowed US$4 billion (Sh415 billion) to build a 500km single track railway with a maximum diesel-powered train speed of 120kph and 80kph for passenger and cargo trains, respectively.
For the same amount of money, Morocco has just completed Africa’s first high-speed rail, a 350 dual track railway (700km of rail) with a maximum speed of 320kph.
Upgrading the existing railway line would have achieved the same performance as the new Standard Gauge Railway (SGR)for a quarter of the cost.
The balance would have financed the new Lamu Port, a railway, a highway, and have enough left for one or two small projects.
Jubilee’s justification for the SGR was to decongest the Mombasa-Malaba highway.
Yet recently, the same administration has decided that it will transport crude oil from Turkana to Mombasa by road.
With two railways running parallel to each other, Jubilee is going to put more trucks on the road.
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