Sh327b cost of railway project justified, says PS

By Jacob Ng’etich

Kenya: The Government has defended the costing of the Standard Gauge Railway (SGR) from Mombasa to Kampala and termed the figure of Sh1.3trillion a creation of politicians who want to derail the project.

Transport and Infrastructure Principal Secretary Nduva Muli said the cost of developing the Mombasa-Nairobi-Kampala railway has been publicly exaggerated to paint the Government in a bad light.

Transport Cabinet Secretary Michael Kamau and Project Manager Solomon Ouna argued separately that the costing was reasonable and justified. In an interview with The Standard, Muli dismissed claims advanced by some politicians that the project will cost Sh1.3 trillion and instead stated the total costing would be Sh221 billion for putting up the railway line and buildings, including stations, depots and maintenance workshops.

“Another Sh106 billion will be used on locomotives and wagons for freight and coaches,” said Muli, adding that the overall cost for the entire project from Mombasa to Nairobi will come to Sh327 billion. 

The PS said the Government undertook a benchmarking exercise to ascertain the competitiveness of the cost of developing the Mombasa-Nairobi-Kampala SGR before it gave the go-ahead and that the country would get value for its money.

According to a report by the Ministry of Transport and Infrastructure, the governments of Ethiopia and Uganda have provided preliminary estimates of building the SGR.

According to cost comparisons, the 353km Sabeta-Mieso railway in Ethiopia is to cost Sh328 million per kilometre while the 609km Mombasa-Nairobi railway will cost Sh250 million per kilometre.

Cement and labour

“The cost comparison has considered the cost of major materials and labour in Kenya compared to Ethiopia and converted the cost of the Mombasa-Nairobi SGR to Ethiopia costs, using suitable indices. It should be borne in mind that the costs of power, cement and labour are considerably lower in Ethiopia than in Kenya,” read the report.

Muli explained that a feasibility study done by a Japanese consultancy company on the Lamu Port-Southern Sudan-Ethiopia Transport (Lappset) project indicated that it would cost $4.2 million to build a kilometre of railway from Lamu to Isiolo, which is far much higher that the current project.

“From Isiolo to Nadapal on the Kenya-Southern Sudan border in the Lappset project, it will cost $5.9 million because of the terrain. This is a clear indication that the Mombasa-Nairobi SGR was far better,” said Muli.

“The recent open tender for the construction of railway between Embakasi to the airport saw the lowest bidder quote $7.2 million a kilometre; this clearly affirms the argument that the cost for the Mombasa-Nairobi Standard Gauge Railway is very competitive,” said Muli. 

Eng Ouna said the unit cost for the Ethiopian project would be $3.83 million per kilometre whereas the Kenyan project was $2.93 million, thereby making the project comparatively cheaper. In order to ensure the contractor adheres to agreed specifications of the railway design, the ministry’s report on the project noted Kenya Railway was in the process of engaging an independent consultant to undertake a design review and supervision of the construction.

The report further explained there was need for immediate development of a high capacity SGR in the northern corridor and the Mombasa-Nairobi section will constitute the first phase.

“The engagement of the China Road and Bridge Corporation, once the financing agreements are completed, will be in line with the law,” it read in part.

Technology transfer

The report shows that the project would reduce the cost of transport in the country, attract investments and reduce carbon emissions.

“We expect an annual Gross Domestic Product of 1.5 per cent and to position Kenya as the transport and logistical hub for the region,” the report stated.

Muli highlighted that the railway would help to create jobs, promote local industries, develop skills (for 15,000 people), transfer technology and reduce accidents.

According to Muli, one of purposes of developing the project is to provide additional transport capacity in the northern transport corridor, thus the project will enjoy political support in the region.