Kenya should ride on SGR potential for real growth

**Madaraka express during the launch of passenger services by President Uhuru Kenyatta. (Photo: Boniface Okendo/Standard)**

Exactly a year ago, I had the privilege of experiencing first-hand the ongoing construction of the Standard Gauge Railway (SGR).

This followed a request I had made to the Kenya Railways Managing Director Atanas Maina that, as a member of a senior government agency (Commission on Revenue Allocation), I had some undefined right to know what the central government had been doing with the money we had asked Parliament to allocate to it.

As it turned out, my request was well received, both by the Government and my commission. We were given permission to go and see what was going on in the project, which was perceived by many people as being “secret”.

And that is how several commissioners and senior members of staff set out on what was to be one of the best site tours I had taken for the last five years.

The tour started at Syokimau Station where the new terminal building was still under construction. At this point, there was no evidence of the SGR as it was still crawling from Athi River. This made me suspect there was more hype than reality on the railway.

Mr Maina finally arrived to give us a briefing, not only of our tour but several other pertinent details. One of them was a graphic model layout showing the route from Mombasa all the way to Nairobi.

I took a photo just to be on the safe side.

After the introduction he handed us to two engineers who were going to be our guides on the safari – one Chinese, one Kenyan.

“Why two engineers?” I asked the MD.

“Because”, he chided me, “this is a joint project and we want you to get both sides of the story. The Chinese can speak English and the Kenyan can speak Chinese so you won’t get conflicting information. This is how we have been doing this project.”

As we left Syokimau armed with several brochures, it started making me feel like one of those British explorers who did the original railway line between 1896 and 1901.

Only I was doing it in reverse, more than 100 years later.

A bit of history

Soon thereafter, we were on our way to Athi River via the lower part of the Nairobi National Park and were instantly awed by the massive concrete pillars making their silent way through the park.

“How do they get those massive structures here?” I asked.

“Just you wait,” replied one of the engineers. “You ain’t seen nothing yet!”

After the Athi River crossing, that is when I realised that I was witnessing a modern-day engineering miracle of unimaginable proportions.

As we headed towards Machakos turn-off, then on to Emali and Mtito Andei, I confirmed my worst fears – that history was being made right here and no one was paying much attention.

Especially our politicians, many of whom had no clue what this massive project was all about.

Way back in early 1890s, directors of the Imperial British East Africa (IBEA) company realised that penetrating the arid and hostile Kenya hinterland to get to Uganda would require a vastly different approach from the caravans they were then using.

That was when a brave engineer came up with a solution: A railway line that would wind its way to Lake Victoria (appropriately named after the British queen) and then on to the source of the Nile at Jinja in Uganda.

This would allow Her Majesty’s government to have total control of the source of the Nile in the event those “crazy” Egyptians started having ideas about using the 200km Suez Canal to frustrate British efforts to go to India and the Far East.

The Canal, which shortened the journey to those distant lands by 7,000km, was opened in 1869 and was a game changer as far as British trade was concerned.

Controlling the source of the Nile was therefore of strategic importance to Britain – in retrospect, a far-fetched ambition.

The railway line was estimated to cost about 7.5 million British pounds, but the Government agreed to give IBEA 5.3 million pounds to do the job.

As it turned out, this was the money actually used to pay for the rail stock, machinery and the engineers (all British), the rest being procured through cheap Indian and local native labour.

If you factor in the hardships endured and the lives lost to both Tsavo lions and diseases (more than 24,000 people, mostly Africans, died over the five-year construction period), the cost changes considerably.

And, of course, there was no compensation for the land acquired along the way.

From Emali and Mtito Andei, we ended up at the Tsavo River crossing. This is perhaps the most remarkable section of the railway line as it flies many metres over the river on its way to Nairobi.

I can safely predict that this will be one of the most picturesque parts of the line and a film maker’s dream.

It makes those engineers of the old rail look like neanderthals.

I took a selfie which I hold dear among my travel memorabilia.

Value propositions

Our final stop was to witness the completion of the Taru overpass. If you have never been to Taru, this is the place where they built a bridge over the Mombasa-Nairobi highway without interfering with the traffic flow.

It is the place where the Chinese showcased their superior rail construction technology as they moved the massive sectional rail pre-fabs to be laid gently on concrete pillars, aligned them and then welded all together.

It is the one time that I wished I had become an engineer instead of a mere bean counter!

Along the way, we kept asking questions about all sorts of things, and I summarise the most important:

1. Fabrication of all the concrete materials was done in a huge warehouse located at Mtito Andei – including the pillars, rail sleepers and drainage system using special local cement.

2. While the main rail track was specially imported from China, the fabrication was all done here.

3. The Chinese engineers were required to have a Kenyan understudy and to ensure that there was genuine knowledge transfer.

4. Wherever there were questions about whether to use Chinese or Kenyan technicians, the preference was always in favour of the Kenyan.

5. There was express design component that required specific value addition to the communities through whose areas the rail passed to avoid the mistakes of the original rail, which was meant to be exclusively for the benefit of the British.

6. Environmental considerations were given high priority, taking into account the terrain through which the rail passed as well as certain aesthetic nuances.

In short, pretty little was left to chance but you would have to use the new rail to appreciate many of them.

Final Word

A project of this magnitude will have its critics and its proponents as expected. The benefits of having the SGR cannot, in my view, be overemphasised.

As a financial consultant, I can say this: Conventional cost-benefit analysis by some of our economists suggests that the costs outweigh the benefits. I beg to differ.

The tools of analysis used by the old school cost-benefit analysts including those at the World Bank tends to underestimate the benefits simply because they do not know how to measure them. Or worse, they do not wish to recognise them.

However, there is new intellectual knowledge that suggests the value proposition for some projects may be much higher than could be imagined in the confines of a bureaucrat’s office or an academic lab. Two local examples will suffice.

One, the building of the Thika super highway has resulted in massive developments on both sides of the highway stretching all the way to Sagana. All you have to do is an aerial Google earth map to see what is happening.

Two, a curious paragraph in Safaricom’s 2016 Annual says that, after using modern methods of cost-benefit analysis, the true value of their product M-Pesa to the country has been estimated to be at least 10 times the profit of Sh38 billion that the company made that year; that is, Sh380 billion.

Forms of extortion

That should be a wake-up call to other organisations that never seem to think about such issues.

Otherwise, why would the good old Queen Victoria have agreed to spend a fortune to give savage African natives an opportunity to see beyond their dark continent?

My admonition to the politicians along the route of the railway line is to maintain a long-term view that seeks answers to what they can do to make money out of the new railway line or improve the quality of life for the residents - instead of just asking for “fair” compensation for “my people” and other forms of extortion that Kenyans are notorious for.

— Prof Kimura is a former commissioner with Commission on Revenue Allocation.