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SGR officially dead. What next?
Rank: Elder Joined: 7/26/2007 Posts: 6,514
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Last mile challenges negate any real advantage rail has in Africa. They should have used the money for other things. Business opportunities are like buses,there's always another one coming
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Rank: Veteran Joined: 11/13/2015 Posts: 1,569
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sparkly wrote:nairobby wrote:sparkly wrote:[quote=nairobby]SGR construction to end in Naivasha as funding wasn't be secured. Kenya wouldn't be able add 378 billion debt to finance Naivasha - Kisumu to its balance sheet anyway. What next now for this white elephant? https://twitter.com/citi...tus/1121837800247234560[/quote] Foolishly looking at the small picture. For your information: 1. Plans for standard gauge railway lines to connect East Africa to West Africa and Cape to Cairo; 2. Plans go back over 100 yrs ago when the British ruled most of Africa; 3. Landfaced countries have to invest in SGR before the landlocked countries, common sennse since railways must terminate at seaports hence Kenya has to commit before UG, SS, CAR; 4. Might not happen in your lifetime but will happen anyway. Historical attempts to connect the East to the West, around or through African well documented re. Vasco Da Gama and Suez Canal. Rail is ancient technology. Rail only accounts for 30% of freight in Europe. I don't know what magic you people think this railway will produce. The fact that we have to subsidise it to work says it all. Africa is not Europe..Western Europe is size of Congo. That's what most people don't realize that Africa is really huge. Kenya is actually Africa-lite. There are parts of Africa that are really remote. SGR has to eventually link East coast to west coast. However it can't be done in a 10 year period the way Uhuru wants it. It will take time. Right now the economy needs a breather. Even China didn't start by building bullet trains. We need to learn to pace ourselves. From what I saw in the briefing China wants to dig in around Nairobi. Any project around Nairobi they looked willing to fund whether it's western bypass, southern bypass, Nairobi re-generation roads, affordable housing. Let's focus on Nairobi regeneration and attract the investors. Of course our silly politicians want to be seen to be spreading development all over like father Christmas instead of focusing on viable areas. Hopefully they learnt a lesson.
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Rank: Elder Joined: 7/23/2008 Posts: 3,017
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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. "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: 10,639 Location: NAIROBI
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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 Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Veteran Joined: 9/21/2011 Posts: 2,032
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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 True economic viability is key. Most of our economies in Africa are agriculture based (we produce same things more or less, so most trading is with other continents rather than inter Africa trade) so you need to ask, for instance, what's the economic benefit to be achieved by extending rail to CAR? Can we sail around the cape for the time being and focus on more urgent issues? I think what important for now is for landlocked countries to be linked to sea through the shortest route. For CAR the shortest route is through Cameroon. The last mile can be done later.
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Rank: Elder Joined: 6/23/2009 Posts: 13,475 Location: nairobi
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limanika 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 True economic viability is key. Most of our economies in Africa are agriculture based (we produce same things more or less, so most trading is with other continents rather than inter Africa trade) so you need to ask, for instance, what's the economic benefit to be achieved by extending rail to CAR? Can we sail around the cape for the time being and focus on more urgent issues? I think what important for now is for landlocked countries to be linked to sea through the shortest route. For CAR the shortest route is through Cameroon. The last mile can be done later. If we continue holding back, when do we develop. Imagine if Kibaki held a similar mindset on infrastructure.. SGR remains a good idea for Kenya but which was abused via fictional lane compensation, corruption etc that led to an illogical cost
HF 30,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 15,750 ABP 6.45
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Rank: Veteran Joined: 9/21/2011 Posts: 2,032
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obiero wrote:limanika 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 True economic viability is key. Most of our economies in Africa are agriculture based (we produce same things more or less, so most trading is with other continents rather than inter Africa trade) so you need to ask, for instance, what's the economic benefit to be achieved by extending rail to CAR? Can we sail around the cape for the time being and focus on more urgent issues? I think what important for now is for landlocked countries to be linked to sea through the shortest route. For CAR the shortest route is through Cameroon. The last mile can be done later. If we continue holding back, when do we develop. Imagine if Kibaki held a similar mindset on infrastructure.. SGR remains a good idea for Kenya but which was abused via fictional lane compensation, corruption etc that led to an illogical cost SGR was very good, noble idea. Problem was that the procurement and construction process was not tailored to ensure viability. Where in the world does it cost 1b to lay 1 km of 2 metal tracks? SGR is good, but NOT at ANY cost.
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Rank: Elder Joined: 7/23/2008 Posts: 3,017
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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. "The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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Rank: Member Joined: 2/20/2007 Posts: 767
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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. Why could they not upgrade the existing railway track to SGR standard? They must find it difficult....... those who have taken authority as the truth, rather than truth as the authority. -G. Massey.
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Rank: Elder Joined: 12/4/2009 Posts: 10,639 Location: NAIROBI
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tom_boy 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. Why could they not upgrade the existing railway track to SGR standard? There is no money to exchange hands/grease palms in upgrading Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Veteran Joined: 11/13/2015 Posts: 1,569
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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: 1,569
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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: 11,901
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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: 10,639 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: 1,569
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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: 18,056 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: 18,056 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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