Kenya’s economy to get boost with launch of new Chinese-built railway line

The Kenyan economy is set to get a boost after President Uhuru Kenyatta launched a new standard gauge railway this week, which was financed and built by China.

The launch coincided with celebrations to mark the 54th anniversary of Kenya’s attainment of internal self-rule from the British in 1963. Christened ‘Madaraka Express’, it made its maiden journey from Mombasa to Nairobi on Thursday.

Initially, Kenyans were expected to pay Ksh900 for economy train rides between the two cities, but the President intervened and announced that they will now only pay Ksh. 700, for a distance of about 472 kilometers. Currently, buses that operate on the route charge anything between Ksh. 800 to Ksh. 1,600 (USD 80 to 160).

First class rides will cost Ksh. 3,000 (USD 30), the Kenya Railways Corporation announced earlier.

It is in the area of freight charges that the new transport system is expected to lower substantially the cost of doing business. Charges for containerized cargo from the Port of Mombasa to the Inland Container Depot in Nairobi will cost Ksh. 51,675 (USD 500). This is expected to reduce the cost of cargo transport by 40 per cent in comparison to the current cost of Ksh. 80,000 (USD 800).

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The train’s symbolic journey brought to an end the use of the adjacent 100-year-old line, which was built in 1900 by the British, using Indian and African labourers. The new 472km line was constructed at a cost of Ksh.327 billion (USD 3.16 billion), co-financed through loans from the Chinese, who also built the railway.

The Exim Bank of China provided 90% of the total financing required for the railway, which was constructed by China Road and Bridge Corporation.

The launch of the railway has come amid claims that its cost was inflated by Ksh100 billion, with some economists arguing that the old railway line could have been upgraded instead.

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The Chinese government, through its Vice Foreign Minister Zhang Ming has defended the project, saying it is an investment that will pay dividends to Kenya in the long run.

“The investment will give the money back since SGR is the largest infrastructural project in Kenya and it will lead to economic growth of the whole region, he said in a statement.”

He was in the country to witness the launch of the railway line in Mombasa, led by President Uhuru and his Deputy, William Ruto.

While on a recent trip to China, President Uhuru asked for a loan of $3.59 billion (about Ksh.370 billion) from the Chinese to extend the railway to the port city of Kisumu in western Kenya.