The second phase of a multibillion-dollar railway in Kenya funded and built by China opened to passenger traffic on Thursday to little fanfare but amid growing concerns about its financial viability.
The 120km (75-mile) section was built at a cost of US$1.5 billion and runs from the capital Nairobi to Naivasha, a town in the Central Rift Valley. When the US$3.2 billion first phase of the line, which runs 470km from the seaport of Mombasa to Nairobi, opened in 2017, Kenyan President Uhuru Kenyatta was joined at an official launch ceremony by Chinese President Xi Jinping’s special envoy State Councillor Wang Yong.
But there was no such pomp on Wednesday when Kenyatta and other local officials were joined only by Wu Peng, China’s ambassador to Kenya, for a maiden ride on the Standard Gauge Railway (SGR), as it is formally known. The president did use the opportunity, however, to hit back at those who have described the project as a white elephant, insisting it would bring huge economic benefits to the country.
“Without infrastructure, there will be no investors. Without investors, there will be no jobs for our youth,” he said.
His comments came after the publication of several reports claiming the railway, which currently ends in Naivasha, is not commercially viable. A third phase of the line – linking Naivasha to Malaba on the Kenya-Uganda border – is in the pipeline but Beijing has asked for a new feasibility study to be carried before it will release any funding for it.
“We will not be discouraged by baseless claims,” Kenyatta said of the reports. “We know where we want to take the country and we will not allow visionless people to discourage us.”
Projects such as roads and railways should not be viewed as profit-making investments but as ways to spur socioeconomic growth, he said.
Despite the apparent reservations regarding the funding for phase three, Wu said that Beijing was still keen to partner Kenya on infrastructure development.
“We kept our promise to deliver phase one of the Nairobi-Malaba SGR project on time, and we encouraged Chinese enterprises to invest in the Naivasha inland container depot and special economic zone,” he said.
“China will continue to support Kenya in development projects as it aims to complete the SGR.”
Wu did not make any specific references to phase three of the project but said that “other countries neighbouring Kenya have expressed their interest in similar projects” and China was ready to “offer advice, expertise and technology”.
Wednesday’s event also saw Kenyatta breaking ground on the new container depot. He said the government had secured US$69 million of funding for the project, which would also include a railway marshalling yard and a logistics zone.
The depot would open before the end of the year, at the same time as cargo trains began using the Naivasha extension, he said.
Analysts, meanwhile, have said that for the railway to make economic sense it must be extended to Uganda, from where it can link to South Sudan, Rwanda and possibly the mineral-rich Democratic Republic of Congo and attract more cargo.
Kenyatta said that the extension to Malaba would be built but he admitted there were obstacles to overcome.
“We will ensure this project gets to its destination,” he said. “There will be challenges along the way but that does not mean we will not do it.”
He said also that before phase three was completed an interchange would be built between the SGR and the old metre-gauge railway in Naivasha to ease the flow of cargo.
China’s reservations about funding the final phase may be linked to accusations that through the Belt and Road Initiative – its multibillion-dollar infrastructure development plan – it has pushed several African nations into debt traps.
Speaking at the second Belt and Road Forum in April, Xi said Beijing would push for sustainable financing to remove such debt burdens and commit to “transparency and clean governance” in its cooperation with African countries.
Meanwhile, the state-owned China Road and Bridge Corporation has won a contract to build a 27km expressway in Nairobi to help ease congestion in the city. The project is set to cost US$599 million and is scheduled for completion in December 2021.
Under the deal, the Chinese firm will have the right to operate the road for 30 years before handing it back to the government.
Source: South China Morning Post