SGR deal underscores need for transparency

SGR cargo train at the Naivasha Inland Container Depot, Nakuru County, January 10, 2022. [Kipsang Joseph, Standard]

The finer details of Kenya’s closely-guarded Standard Gauge Railway (SGR) deal with China have been revealed and, rightfully so, ignited a political storm.

According to the document released by Transport Cabinet Secretary Kipchumba Murkomen, the loan terms of the Sh670 billion project included a 2.0 per cent annual interest, with a further management and commitment fee at 0.25 per cent. The loan has a 20-year tenure during which goods bought with SGR proceeds would be sourced from China.

Controversy has always stalked the SGR project. Upon its execution and official launch in May 2017, there were concerns over its viability. Apart from fears that it was relatively overpriced, issues arose on the quality of the diesel locomotives.

Economists then concluded that Kenyans may not have gotten value for money, given the price comparisons with the 756km Addis Ababa-Djibouti line that cost less. The Ethiopian railway project is 250km longer and is electrified just as Tanzania’s.

There were further concerns around the project’s income projections which came a cropper. Indeed, Kenya Railways has contended with huge losses from SGR as operating costs have routinely outweighed income since its launch.

These aside, the SGR project faced irreparable integrity loss after the government consistently refused to make public details of its contract with China. It bred discontent and corruption fears even as the taxpayers tightened their belts to service the punitive loan.

We warn that unwarranted secrecy around State projects should never be the case in future. Public procurement is vulnerable to corruption. Decision-makers have a duty not just to seek public views before inking deals with foreign governments, but also put such important contracts in full public domain.

Undue politicisation, like in the case of SGR, has the potential of derailing noble projects. We challenge the new administration to not only reveal in full details of this contract, but also of all contracts that it will ink. In any case, these projects are not the government’s, they belong to the people.