Economists warn on viability of railway project

March 12, 2014 3:27 pm


President Uhuru Kenyatta during the launch of Standard Gauge Railway line/FILE
President Uhuru Kenyatta during the launch of Standard Gauge Railway line/FILE
NAIROBI, Kenya, Mar 12 – Economic experts have warned that the Standard Gauge Railway project will have much more negative implications on the economy than the huge public wage bill that is currently being discussed in the public.

While describing it as the largest project in Kenya’s history, the Managing Director of Africa Economics David Ndii indicated that the borrowing necessitated by the project will increase the country’s foreign debt by about a third of the total debt.

He pointed out that not enough consultations had taken place before the project was initiated.

“Unless we are keeping two sets of books, I have very serious doubts about the magnitude of the wage bill crisis that is being projected. What is probably serious is the pressure being put on the budget by this project and others of a serious nature. So we cannot just wake up one day and say that we had not realised that our wage bill is growing very unsustainably,” he said at a public forum in Nairobi.

A consultant in public affairs and policy Kiriro wa Ngugi said that the government had neither outlined the different options available nor the technical justification for one gauge over another, nor even provided an assessment of the costs and benefits of the different alternatives.

“Our existing railway is a metre gauge. The physical distance between the inside of one rail to the inside of the other on the railway track is exactly one metre. This gauge is also used in Argentina, Brazil, Chile, Tunisia, Vietnam and Thailand, among others,” he stated.

“It is the gauge used in the railway network of the EAC countries except the Tazara line connecting Tanzania with Zambia, which is 1,067mm (Cape gauge). The majority of the railways in southern Africa, Japan, Indonesia and Australia use this Cape gauge.”

He explained that a main justification for choosing the standard gauge is to ensure railways are of the same gauge for better connectivity between neighbouring countries.

He stated that in Kenya’s current situation, the logical commercial demands of regional connectivity is to retain the metre gauge railway.

“But note that we are building a new standard gauge railway between Mombasa and Nairobi only! The logic of regional connectivity does not, therefore, apply,” he continued.

His sentiments were echoed by the Ufungamano Multi Sectoral Forum Treasurer Boniface Adoyo who emphasised that appropriate institutional reforms and an assessment of the costs and benefits of the project need to be undertaken before its commencement.

“Despite the manifest implication of this ballooning wage bill, the government is going full speed ahead with the Mombasa-Nairobi Standard Gauge Railway project, a move that will needlessly further push the country’s economy to its limit,” he said.

He outlined four major alternatives to upgrade the railway network in the East Africa Community Countries which include the rehabilitation of the existing railway network which would allow a phased approach to its development, consistent with current and projected demand.

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