An SGR line being built: There are fears the second phase of the project will delay due to funding. PHOTO | FILE | NMG
Summary
- MPs responded to the decision with a statement saying “the reduction in funding for the project could result in delayed completion and increase in interest and other claims on delayed payments and increased costs of projects than originally planned.”
- Phase II of the SGR project, covering the Nairobi-Naivasha section of the line, has faced multiple challenges since work on it began in the last quarter of 2017.
- A court case was filed by environmentalists opposed to the line’s passage through the Nairobi National Park.
The financier of the standard gauge railway (SGR), China Exim
Bank, has cut funding to ongoing work on the second phase of the
railroad by a whopping Sh32 billion, citing the barrage of court cases
against the project.
Supplementary budget documents
tabled in Parliament last week show that allocations to the SGR project
dropped by Sh42 billion, including the Sh32 billion held back by the
lender.
The remaining Sh10 billion was counterpart
financing from the railway development levy fund that has now been
reallocated to pay contractors who built the Mombasa-Nairobi section of
the project and settle the management fees payable to the Chinese
operator of the rail line.
“The State department had
projects such as Nairobi-Naivasha SGR allocation reduced by Sh42 billion
of which Sh32 billion was from a donor because of court cases, while
Sh10 billion railway development levy fund was re-allocated to
Mombasa-Nairobi SGR project,” the supplementary budget II says.
MPs responded to the decision with a statement saying “the
reduction in funding for the project could result in delayed completion
and increase in interest and other claims on delayed payments and
increased costs of projects than originally planned.”
Multiple challenges
Phase
II of the SGR project, covering the Nairobi-Naivasha section of the
line, has faced multiple challenges since work on it began in the last
quarter of 2017, including a court case filed by environmentalists
opposed to the line’s passage through the Nairobi National Park.
Last
September, the National Environment Tribunal temporarily stopped
construction of the section until a dispute challenging it is
determined.
The
120-kilometre Nairobi-Naivasha line, which cuts through the Nairobi
National Park, town centres and agricultural zones like Maai Mahiu will
cost the taxpayer Sh150 billion.
It connects to the
recently completed Mombasa-Nairobi segment and is ultimately expected to
connect Nairobi to Kampala via Naivasha, Kisumu and Malaba. The
contractor, China Road and Bridge Corporation (CRBC), moved to site last
October and has been working since despite numerous challenges.
Delays
Last
September, lack of a land compensation plan delayed works on the
project up to four months after Kenya secured funding from the Chinese.
Works
on the project were once again suspended for about one week in January
as workers protested low pay and harsh working conditions.
Delay
in completing the section could also affect construction of the segment
to Malaba, where it will connect with the Ugandan section.
The
Kenyan SGR project is in competition with Tanzania’s Dar es Salaam line
that also seeks to connect landlocked Uganda and Rwanda respectively.
Tanzania
has already grabbed an oil pipeline that was to run from Uganda through
Kenya to the coast and Nairobi is keen on ensuring a repeat of the same
does not happen.
Kenya Railways, the project owner, did not respond to our queries on the subject.
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