Kenya Opens Second Phase of Massive Railway Project

The newly built Standard Gauge Railway line that passes through Maai Mahiu to the Suswa station.

Naivasha — Kenya's President Uhuru Kenyatta officially opened on Wednesday the second phase of his flagship infrastructure project: a Chinese-funded and built railway that will eventually link the port of Mombasa to Uganda.

The latest stretch of track cost $1.5 billion and runs from Nairobi to the Rift Valley town of Naivasha. But critics say the cost of the railway is plunging Kenya into debt.

Waving the Kenyan flag, Kenyatta inaugurated the second phase of the country's new railway.

The president then joined the first ride and listened to the on-board announcements.

The new track is 120 kilometers (75 miles) long and has 12 stations. Passengers can ride the trains, but the railway is mainly for cargo. The track will eventually lead to an inland container depot, from where containers will be distributed to Uganda and Rwanda, and to South Sudan.

The train stopped at every station, where a cheering crowd awaited the president. He promised them that the new railway will bring prosperity.

Kenyatta said that if the railway comes here, development also comes here.

The cost of 1.5 billion U.S. dollars for construction of the second phase comes up on top of the $3.2 billion spent for the first stretch from Mombasa to Nairobi.

President Kenyatta says this money will be earned back by the economic development spurred on by the railway.

"The completion of the Nairobi Suswa section of the SGR project is expected to revolutionize the development of the surrounding areas," Kenyatta said.

The loans are with Chinese banks. Wu Peng is the Chinese ambassador to Kenya. He said in return China is not only lending but also investing in Kenya with the coming of the railway

"We encourage Chinese enterprises to invest in the Naivasha ICD and the special economic zones," Peng said.

The railway currently generates $75 million per year from passengers and cargo. At that pace, the loan will be paid back in 60 years.

Kenya hopes to see revenues rise once the railway is connected to the neighboring countries.  However, there is no timetable for construction of the third and final phase.  Officials have yet to secure the financing.

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