The full details of the standard gauge railway (SGR) scandal are emerging, confirming all the fears that Kenyans never got value from the project. Revitalising the railway transport that had collapsed in the 1990s was certainly a noble objective. Chaos on the road and the huge flight costs necessitated alternative transport modes. A railway, with its capacity for large haul and affordable costs, was the best option.
But the SGR came at an astronomical cost and, whereas it has eased transport between Nairobi and Mombasa since its completion and launch in June 2017, it is a major drain to the economy. The government spends Sh1.5 billion every month on operational costs yet the incomes from ticket sales and cargo haulage is just Sh841 million, less by nearly half the expenses.
Yet that is just the overhead. The total cost of putting up the rail line was Sh327 billion, paid back at an interest rate of more than five per cent for 15 years. Comparatively, neighbours like Tanzania and Ethiopia have done or are working on more expansive rail projects, and shopping for electric trains, at a far much lower price. To be sure, Kenya’s are diesel-powered trains yet the trend worldwide is electric, which is efficient and cost-effective.
Details published in this newspaper this week point to a project that was customised to rob taxpayers. Construction costs, including peripherals like office and welfare expenses, were hugely inflated, making it a mega rip-off. Worse, in a country teeming with thousands of educated but unemployed youth, the Chinese contractors audaciously brought some 6,000 of their nationals to do the work locals could do. The bulk of materials for the rail line was imported, meaning local suppliers scarcely gained from a project on their land. We exported cash and vacated jobs abroad.
The project had all the markings of a swindle. Contracting was shrouded in mystery and despite pledges by none other than President Uhuru Kenyatta that the documents would be made public for public scrutiny, nothing has been forthcoming.
Unfortunately, even after the disaster of the first phase, the government went ahead to extend the line to Suswa, hopefully, to expand to the western circuit. Having been launched in pomp and glamour, the extended line is a dud. No cargo has ever been moved in what has aptly been tagged the line to nowhere. Passenger transport is on and off.
SGR may stand out as the most expansive project under the current administration. But it is a scandal of monumental proportion. Investigative agencies have an obligation to interrogate this matter and cause criminal charges against those who signed the contracts and committed the country to this economic morass.