SHAW: Is the SGR a veritable success or an unsustainable extravaganza? - Daily Nation

Is the SGR a veritable success or an unsustainable extravaganza?

Wednesday July 11 2018

Standard Gauge Railway

A Standard Gauge Railway passenger train arrives in Nairobi on May 31, 2017. The railway line which was constructed at the cost of Sh372 billion, 90 per cent being funded by China Exim Bank. PHOTO | FILE | NATION MEDIA GROUP 

By ROBERT SHAW
More by this Author

The SGR is a part and parcel of the Kenyan fabric. Its passenger and cargo trains run like clockwork and the whole operation cruises along with impressive ease. Indeed, on the surface it looks like an example that much of Kenya could learn from.

Everything from its booking system to punctuality. It has proved increasingly popular and convenient for passengers and even attracted sceptics such as myself.

In theory, it all makes sense. We are the gateway for and the hub of East Africa and beyond. Several countries rely on us for imports and exports.

Our roads are clogged and continually worn down by heavy truckloads of cargo. Our old creaking railway from the days of East African Railways and Harbours is a struggling dinosaur for years of neglect and misuse.

It has been proved again and again over the centuries that a well-run railway can be the most economical and effective way to transport bulk cargo and, indeed, large volumes of passengers.

SEAMLESS TRANSPORT ROUTE

In comes SGR, which, in time, aims to become a seamless transport route to Uganda and beyond. But that is where the good news ends.

The SGR has been bedraggled in controversy. First, SGR1 from Miritini to Syokimau was notoriously expensive to build.

The project was not subjected to competitive tendering but cobbled together by a cabal of officials from Kenya and China.

The design, construction and operation were not segmented but fused — against standard professional norms. I suspect it contributed to the high cost.

I have no issue with the concept and vision, just the cost — one of the major causes of our surging debt.

A simple cost benefit analysis blurts out the question as to whether the gargantuan investment was worth it and could we not have built it for less?

CONTROVERSIES

Behind the semblance of a smoothly run operation lie several questions and controversies. Its day-to-day operation runs at a considerable loss.

It is important to be clear here: It’s running operation minus the debt repayment per se. Kenya Railways Managing Director Atanus Maina talks about operational viability in three to five years but that could be wishful thinking.

The bottom line is, its operational costs are abnormally high. There are 50 Chinese drivers alone and several hundreds of other Chinese manning the operation at every level and station, all paid by the revenue and subsidies.

If it wasn’t for the station names and the mix of passengers, one could be forgiven for thinking one were in mainland China!

The big and burning question is where to go from here because this project is heading into more controversy and massive debt that will become unsustainable. One controversy is its routing through parts of our precious but embattled Nairobi National Park.

INDEPENDENT BODY

The way forward does not lie with Kenya Railways or China Road and Bridge Corporation (CRBC) nor with any affiliate.

It lies with the government being bold enough to professionally recruit and appoint an independent body to review the operation, including ongoing and proposed construction, from top to bottom and from Mombasa to Uganda.

The composition of the review team must have no representatives from any interested parties — such as the government, Kenya Railways or CRBC. Of course, it can seek views from interested parties but the buck stops with it.

That body should be mandated to come up with recommendations on how to both overhaul and streamline the SGR in toto so that it becomes a successful, integral and sustainable cog in our infrastructure network.

There are several red flags that can be pointed out in its terms of reference. One is how to wean the operation of its gross overdependence on CRBC and how it can be viable sooner rather than later.

EVALUATION

Another is an immediate evaluation of its Naivasha leg. A third is how to proceed more professionally, especially in transaction, construction and operations.

A fourth is a much more social and environmental approach to construction. The SGR is not going through an empty desert but people’s land and homes and some jewels such as the Tsavo National Park.

Last but not least, the government must implement the recommendations. That will move us to a more professional, economical and transparent way of going about key infrastructural projects and getting better value.

Quite often, such projects are viewed as cash cows to be fleeced mercilessly. They are not. They are there to develop Kenya for its people. Period.

Mr Shaw is a public policy and economic analyst:[email protected]

Advertisement