Kenya: Review Suswa 'White Elephant' SGR Sector

5 December 2019

The extension of the standard gauge railway from Nairobi to Suswa in Narok County at a cost of Sh150 billion was billed to open up the region and create new trading zones inland. In the grand scheme of things, the line was to extend to Naivasha and, ultimately, Kisumu and Busia border. But that was never to be as plans later changed due to cash shortfalls.

As we have explained on several occasions, having a rail line that ends in Suswa, or even Naivasha, does not make economic sense. It's a misplaced investment particularly at a time of a depressed economy and with numerous competing national interests.

At its launch, this newspaper termed the section a "railway to nowhere", which terribly irritated the administration. No less than President Kenyatta took a swipe at the tag and dismissed the critics as anti-development. But the reality is sinking home.

A report published in this newspaper yesterday gave a detailed account of the operation of the rail line. Other than a few trains to Rongai and Ngong, which do daily runs to and from the city, the line to Suswa only operates over the weekend. The trains are overwhelmingly underused, operating far below capacity.

We have a veritable disaster in the making. Here is an obvious case of misplaced investment; a white elephant, so to speak.

The reason we're raising this matter is that the current administration has an obsession with capital infrastructure development, but which is not properly thought through. The net result is that the country is borrowing money for infrastructure, but ends up piling up debts it cannot repay.

The SGR line from Mombasa to Nairobi stands out as a major infrastructure development since Independence. But at painfully high costs. It was built at a cost of Sh327 billion, funded by a loan from China that attracts a high interest rate.

To repay the money, the railway has to make good sums of money, but that has not been forthcoming. In the first year of operation, Kenya Railways spent Sh12 billion to run the trains, but its incomes were less than Sh10 billion. Such reality has forced the government to push through some unpleasant policies. For instance, it has forcibly pushed cargo operators from Mombasa port to use the railway in a bid to help recoup the money.

But then, businesses do not operate that way.

The government has to review the SGR line to Suswa and find a more practical way of making it work. It does not make sense to put in so much money and then let the infrastructure waste away. Importantly, the government must desist from venturing into populist and expensive projects without commensurate returns.

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