12 June 2014

Kenya: Govt Allocates Sh19.4 Billion for Standard Gauge Railway

Photo: Monicah Mwangi/The Star
Tough economic times after the government read the annual budget in Kenya (file photo).

Nairobi — The government has allocated Sh19.4 billion in the 2014-15 Budget to fund its portion of the Standard Gauge Railway project, set to cost over Sh300 billion.

The money is Kenya's funding for the project after the Exim Bank of China initially provided Sh331 billion necessary for the construction of the SGR.

This initiative will help link the region's trading capacity where each of the member states will meet the cost of constructing a Standard Gauge Rail under the ongoing regional infrastructure cooperation.

PKF Services Tax consultant, James Mulili says the project is supplemented by the Public Private Partnership (PPP) where the county is set to enjoy considerable cost savings in the next three to five years, once the construction is completed.

"It is a well thought out project infrastructure wise and the government inviting the private sector into the development process is a good initiative which will also create employment for a lot of Kenyans. If this fails, the economic loss may be huge." He said.

"There are so many development projects which have not yet been completed; it's far much more efficient to complete the gauge promptly. Kenya's status as the regional logistics hub could greatly be weakened should work on the standard gauge railway delay any further."

The East African Standard Gauge Railway, planned to be operational by 2018, is poised to haul 28 million tonnes of cargo annually between Kenya, Uganda, and Rwanda.

The project undertaken by the China Communications and Construction Company will stretch to Kampala, Uganda then to Kigali in Rwanda and finally to Juba in South Sudan covering a total of 2,935 kilometres.


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