22 January 2014

Kenya: Standard Gauge Railway to Cost Sh447.5 Billion, Says Treasury CS

Photo: Nation
Railway line construction (file photo).

TREASURY Secretary Henry Rotich has said the construction of the standard gauge railway will cost the taxpayer Sh447.5 billion. The amount is Sh120 billion more than what Transport Secretary Michael Kamau had projected on Monday.

While appearing before the Public Investments Committee yesterday, Rotich revealed that the amount includes the Sh327 billion which is the total cost of civil works and the purchase of locomotives and rolling stocks.

He said an additional Sh8 billion will go towards acquiring a total of 2,253 hectares of land meant for the railway corridor and Sh10.6 billion for upgrading the Embakasi Inland Depot to handle freight from the SGR and an additional Sh1billion to purchase land for the expansion of the depot. Consultancy and supervision will cost Sh3 billion.

"However, interest rates will be charged on the Sh327 billion as that is the concession loan the Kenya government received from the Chinese government," Rotich said.

Members of the committee chaired by Eldas MP Adan Keinan told Rotich to explain the figures after he appeared to have quoted figures that varied with the ones given by Kamau.

"The two figures contain two different pieces of information. Sh447.5 billion contains all the interest rates, management and commitment fees and the cost of insurance for the next 20 years," he said.

However, on the second day of the probe by the committee confusing details continued to emerge as questions were raised on the legality of the contract that was signed between Kenya Railways and the China Road and Bridge Corporation.

The committee was told the government-to-government agreement may not apply because it had not been ratified by Parliament as required by law.

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