Why SGR Uganda is still there to be grabbed

Geza Ulole

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Why Museveni returned from China without SGR deal
SATURDAY SEPTEMBER 15 2018


Ugandan President Yoweri Museveni (left) meets Chinese President Xi Jinping in Beijing on September 6, 2018. PHOTO | AFP




In Summary
  • Firming up funding for the Ugandan side of the railway was said to have been on the agenda before Focac.
  • But these plans were scuttled after President Uhuru Kenyatta asked China to give Kenya a grant to complete the Naivasha –Kisumu leg of the SGR.
  • Kenya’s failure to conclude a financing deal means Uganda is a long way from starting to build its side of the SGR.


By DICTA ASIIMWE
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Opinion among experts is divided on how fruitful President Yoweri Museveni’s recent trip to the China-Africa forum was after it emerged he failed to ink a deal on funding for the the standard gauge railway.

Before the Forum on China-Africa Co-operation summit held last week, officials in Kampala had said that firming up plans for financing the SGR would be high on President Museveni’s agenda.

But these plans were scuttled after President Uhuru Kenyatta asked China to give Kenya a grant to complete the Naivasha –Kisumu leg of the SGR.

The SGR has been promoted as the most important link for East Africa since the Uganda Railway was built in 1900.

Initial plans envisaged a railway line from the Mombasa Port in Kenya to Uganda, Rwanda and connecting back to Tanzania and the DRC.

A second line would connect South Sudan to the north. Currently the Kenya, Uganda and South Sudan links are the only ones in the discussion.

Kenya’s failure to conclude a financing deal means Uganda is a long way from starting to build its side of the SGR.
China had already told Uganda that it would only fund the Malaba-Kampala section of the SGR if Kenya committed to funding the entire Nairobi-Malaba leg of the project.

“Once Kenya and China commit to finance the remaining leg of the SGR, Uganda will be ready to start. We in Uganda are ready to conclude the financing agreements,” said Kieth Muhakanizi, Secretary to the Treasury.

Some economists say that it is good that Uganda got token financing from the summit instead of concluding what would have been a costly white elephant for Uganda.

“Technically and economically the failure to get financing for the standard gauge railway is a good thing as it saves us from a white elephant, but politicians and thieves will disagree,” said Fred Muhumuza, an independent researcher who previously worked as policy adviser to the Ministry of Finance.

Trapped in debt
Ezra Munyambonera, head of the Macroeconomics Department at the Economic Policy Research Centre agrees.

Dr Munyambonera said a number of African countries are increasingly trapped in debt due to China’s previous unwillingness to pay more attention to the types of projects they lend to.

Most of this debt was acquired to invest in high cost infrastructure projects like the standard gauge railway and ports.

The State House press team presented the media with signings of MoUs that President Museveni witnessed including one between the Uganda National Oil Company and the state-owned Chinese National Off Shore Oil Company (CNOOC) for oil exploration in the Albertine graben.

Sources say these were a face-saving effort as they could have been concluded without the involvement of the president.

Presidential spokesperson Don Wanyama confirmed that the agreements signed at the summit were really the business of the Ministry of Foreign Affairs and that State House didn’t know much about the contents.

Other documents signed while President Museveni was in Beijing include an economic and technical co-operation agreement worth $29.1 million.

Why Museveni returned from China without SGR deal

MY TAKE
JPM should not relent on this, he should send a delegation of smart people for persuasion. YKM needs a tangible discussion n he will be convinced. One more advice make sure Kagame, Nkurunzinza n Museveni are present at the launch of Makutupora-Tabora section.
 
Mkikuyu- Akili timamu said:
Museveni has no intrest in kenya SGR. He knows its a flop
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My two cents
I see the same thing while he asks GoK to commit to Naivasha-Malaba section, he refused to grant the same commitment of Mombasa port being the only gateway for Uganda's imports n exports!

This main reason will terminate Kenya's SGR at Kisumu n that will only happen if Beijing is convinced with the feasibility study Kenya is to produce for the whole track i.e. Mombasa-Malaba! Mind u the contractor CRBC might already have theirs already no cooking data business over this matter.

That uncharacteristically Chinese' coming out openly n expressing a doubt on the viability of the project by demanding a feasibility study be carried out is precisely a sad story to Kenya. Especially, after the attempts by KR to take cargo from roads to SGR was met with fiercely resistance by trucks operators n seems to have fail contrary to envisaged returns.

Truth to be called, can be linked with seeing how diligently has JPM executed his project. At the FOCAC meeting Xi Jinping mentioned of this rivalry.

To be fair I don't see the Chinese paying half of the cost following Uhuru's request. They will want something in return. The key to how things are turning out is graft and embezzlement brn GoK officials and Chinese company involved in tendering process.



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Questions on viability of SGR refuse to go away after China cuts funding
SUNDAY SEPTEMBER 16 2018


Cargo at the Inland Container Depot after being transported from Mombasa via the standard gauge railway on July 31. FILE PHOTO | NMG
In Summary
  • Supplementary budget documents tabled in Parliament in April also showed allocations to the SGR project dropped by Sh42 billion, including the Sh32 billion held back by the bank.

The question of whether the Nairobi-Naivasha-Kisumu Standard Gauge Railway (SGR) section is viable or not came to the fore when the China Exim Bank cut its funding for the Naivasha route by Sh32 billion.

Supplementary budget documents tabled in Parliament in April also showed allocations to the SGR project dropped by Sh42 billion, including the Sh32 billion held back by the bank.

The 120-kilometre Nairobi-Naivasha line that cuts through the Nairobi National Park, traversing several town centres and agricultural areas, will cost Sh150 billion.

The concerns on the fate of the line were heightened when President Uhuru Kenyatta failed to secure funds as had been highly expected during his China visit two weeks ago. Kenya and the China Communications Construction Company had already reached a deal for construction of the Naivasha-Kisumu stretch.

The remaining bits of the agreement were to be finalised during the President’s Beijing visit. However, this did not happen, raising eyebrows of what is in store for the multibillion project.

Transport Cabinet Secretary James Macharia had also said the signing of the funding would be done in Beijing during the China-Africa Forum (Focac).

“All documents are ready. However, when we engaged the Chinese government, it was agreed that they do support it, but we need to complete the feasibility study, not just for Naivasha to Kisumu but also all the way from Mombasa to Kisumu so that we can establish its commercial viability,” CS Macharia told a press briefing in Beijing.

Analysts are now questioning why the issue of viability is being raised when talks on funding had been concluded and all that remained was just putting pen to paper.

Shippers Council of Eastern Africa (SCEA) executive officer Gilbert Lang’at said there was need to market the Nairobi-Naivasha-Kisumu routes “in a more holistic manner” than is the case currently.

“The Mombasa-Nairobi line is basically for evacuation of cargo from the Mombasa port and it could be argued that this section will be financed by this cargo and passengers but the other sections do not have that assurance,” he said.

With the support of the passenger service, the 472-kilometre Mombasa-Nairobi section of the line, built at a cost of Sh327 billion, has largely been hailed as a success operating between two major cities despite teething problems.

However, this might not be the case with the other sections.

“The government needs to market the planned industrial park in Naivasha in an export-oriented approach where value addition in fresh produce from horticulture are exported by sea,” Mr Lang’at said, adding that there is also a need to ensure that the procedures for setting up businesses at the park were investor-friendly.

According to Alfayo Otuke, former Kenya Transporters Association (KTA) executive officer, who was a member of the SGR freight service implementation committee, the Naivasha-Kisumu section was likely to be hit by viability question since it was meant to connect to Uganda, which has shifted preference to the Tanzania route.

“Uganda preferred to build its railway through Tanzania, which will provide a shorter route to the Indian Ocean. With Tanzania’s planned railway to Burundi and Rwanda ( how got skipped 😁) and link to the DRC (Democratic Republic of Congo), the Kisumu line does not look feasible at the moment and there is need to go back to the drawing board,” he said.

Mr Otuke, who is also a director at the Global Maritime — a consultancy firm that specialises in tracking of containers among other functions — argued that the planned industrial park in Naivasha should have been located in Nakuru so that the line could benefit from passenger and cargo transport.
“Since it will take time for the industrial park to be fully operational, the best bet would have been Nakuru, one of the major towns in the country,” he said, adding that poor planning seems to be hurting the mega infrastructure.

Failure to consult
He said poor planning and hurried implementation of the freight service is the cause of the current biting congestion at the Nairobi’s Inland Container Depot (ICD). Failure to consult widely with all transport stakeholders will be bane of the SGR, he noted.

“Trucks cannot access the ICD properly because there is no marshalling yard. During the consultation period where we were asked to give views on how best cargo would be transported to the facility, we raised this concern but it was not taken into consideration,” he added. And went on: “The result is that the same congestion we witnessed in Mombasa when Container Freight Stations (CFSs) were established has now been exported to Nairobi.”

Currently, there are eight trains ferrying goods to the ICD daily, each carrying 108 containers. But one of the initial challenges Kenya Railways faced in the implementation of the freight service was containers being loaded onto the trains without the authority or knowledge of importers.

This resulted to a backlog of empty containers at the ICD after importers abandoned them, citing huge costs in retuning them to shipping lines designated yards in Mombasa.

A week ago, the ICD had more than 10,000 containers, with the Kenya Freight and Warehousing Association (Kifwa) chairman William Ojonyo protesting that delays in clearing of goods at the facility was costing importers to the tune of Sh70 million daily.

Mr Lang’at said it was taking up to 14 days to clear goods at the ICD, which had forced some manufacturers to scale down on production since they were not getting their raw materials on time.

“Systems are not working and importers have resigned to fate, paying millions in demurrage charges,” he said.

However, Kenya Ports Authority general manager operations Captain William Ruto blamed importers for not collecting their cargo. “The problem we have is that importers are not collecting their goods on time as required,” he said.

CFS Association of Kenya also protested overloading of goods onto freight trains, saying it was posing unfair competition. The association cited loss of business as a result of the government’s action.

Questions on viability of SGR refuse to go away after China cuts
 
thisdayes said:
Poor planning & hurried implementation!! Hili limesemwa sana humu ila watu walikua wanabisha wakisema wako aggressive siyo kulala. Sasa ukweli unajitenga na pumba
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Miradi mikubwa kama hii huhitaji muda kwa ajili ya Planning, studies na Implementation, lazima tafiti zifanyike na kujiridhisha,
Sasa hawa wenzetu wanajiita Aggressive, Mihemko kwa kwenda mbele, hata Leo wanahoji kwanini Bomba la mafuta halijaanza kujengwa, watu wenye utulivu wa akili huwa kamwe hawakurupuki,
If you need long-term Better outcomes, don't be Aggressive, tulizeni Akili wakenya,
Sasa Habari ya Reli ndio imeishia hapo, na pia ile bandari ya Lamu ni Tembo mkubwa Mweupe.
 
hivi niulize tu...tanzania haijengi reli?
 
Geza Ulole said:
tatizo tendering process yenu ilikuwa si kwa maslahi ya Kenya bali binafsi rushwa kaka!
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unaweza kuwa unasema ukweli ila point ilikuwa mwenzako kasema sgr yetu hakukuwa na preparation ya kutosha..tulifanya kuharakisha mambo kisa tupo aggressive na ingetakikana tuwe na subira ili kupata better longterm outcomes...ndio nami nauliza...ni nchi ipi isiotaka maendeleo kwa haraka? huko bongo kwani hamtaki kuwa na reli hivi karibuni? au mnataka ijengwe kwa miaka ishirini?
 
Apple Computer inc. Was Not the first company to manufacture a computer or a phone. More "aggresive companies like HP/compaq had already been in the game for 10 years and Nokia more than 30 years in phone business.
That said, Apple Inc makes the best margins on phones and PCs than all others, Its the most capitalised company with $1trn valuation.
Innovation/ aggressiveness means nothing unless used effectively, You would be shocked that Motorola has more technology patents than Apple inc
 
Uko sahihi.. hii miradi ukifanya ili uwahi kumaliza ili uwe wa kwanza unaishia kuchekesha. Mfano gharama zilizo tumika kujenga BRT tungeweza kujenga ma flyover ili tuwe wa kwanza. Ila mipango ili husika sana, sasa ma flyover yana jengwa huku waki consider lanes za BRT. Magu alivyo cancel deal la SGR na wachina walituona wajinga. Sasa vilio vina tawala! Ujenzi wa bomba watu wana chora michoro mpaka ya kupeleka gas UG wana cheka eti tume lala wao wangekua wamesha maliza. The list goes on... ila at the end we are the ones who laugh last. Kenya tumieni utaalamu siyo siasa kufanya miradi mikubwa mtaumia sana.
 
Geza Ulole said:
tatizo tendering process yenu ilikuwa si kwa maslahi ya Kenya bali binafsi rushwa kaka!
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Kama ile ya UG ilitumika $200m kwenye bribe activities hii ya Ken itakua zaidi ya $400m! Na Rushwa iki ingia mnachotwa kama mazuzu. ICD imekua poor planned, Industrial park imekua alocated sehemu mbaya, ma train wamechaguliwa ya ovyo, wame ambiwa hawana umeme wa kutosha for electric trains! per km cost ime ongezwa maradufu na aristocrats wao walikua wana kubali kirahisi kwa kua wame wekwa mfukoni wakipiga collabo na UHURUTO hawa ndiyo wame neemeka zaidi. Siku phase one ya Tz ikiisha na midude ya kisasa iki anza ku cruise kwa zaidi ya 200Km/hr the Kenya general public ita pata funzo na watujua walibebwa ujinga. I cant wait to see their reaction
 
Wakenya huwa mnasema mpo Aggressive, jambo ambalo ukweli watu wa East Africa tulikuwa tuna admire, lakini kama wachangiaji hapo juu walivyosema, aggressiveness kwenye nchi maskini mara nyingi ni madaraja ya rushwa na kuumiza watu.

Watanzania sisi sio slow, bali ni CAREFUL na hicho kitu naona kinaanza kuzaa matunda, kama JK angekurupuka enzi zile na sisi leo tungekuwa tunalia, kuwa makini ni jambo jema hasa pale unapokuwa unafanya mipango ya muda mrefu ya nchi.

Next time ndugu zetu kuweni makini na watu mnaowapa nchi.. Mwanasiasa kuwa mfanyabiashara mkubwa kwa nchi zetu hizi ni kuandika hasara..

Jambo lingine ambalo linanishangaza ni jinsi ambavyo mna miradi mikubwa ya barabara lakini inaonekana hakuna msukumo mkubwa wa usafiri wa umma. Na ndio maana pamoja na Nairobi kuwa na hizo interchanges na flyovers kuna foleni balaa.. karibuni hapa nilikuwa natoka Naivasha, yani nimekaa pale Waiyaki way nashangaa gari hazisogei, imenichukua almost 2 hours kufika airport, Mombasa road foleni..
 
Mliharakisha bila kuzingatia interest mkifikiria kujenga kwanza means cutting short Tanzania's chance. Now JPM is whipping u with affordable cost!
 
Mimi niliuliza hapa few weeks ago, who has committed themselves on Kenyan SGR? Tuliona Salva Kiir, kagame na Museveni wakishika spanner na kufunga funga some bolts and nuts, wakanywa chai na kundoka. Hakuna akiyeweka signature to commit themselves with the project, sasa kama sio kukurupuka ni nini. If Kenyatta would have a contract with those EAC leaders, nadhani hata Chinese wangeona yes, there is money to be made here. Lakini sasa hivi as is stand, the railway line will only serve Kenyan economy which is not enough to attract Chinese interests.
 
Niliona hawa jamaa ni hopeless baada ya Kuona Tanzania inajenga electric railways na wao on the spot wakaja na mpango wa electrification of the diesel railways which was absolutely unplanned from the first place

Hapo ndo nilijua these guys don't have commitment on what they are doing, they are aggressive in conquering and looking to be admirable by its neighbors which does not make any sense in business.

Sasa niulize tu ule mpango wao wa SGR electrification uliishia wapi?
 
Hahah!! hamna electrification yoyote kwenye ule mtambo wa gongo,hile ilikuwa ni njama tu ya uhuruto kutuliza hasira za wakenya.
 
PowelTz said:
Hahah!! hamna electrification yoyote kwenye ule mtambo wa gongo,hile ilikuwa ni njama tu ya uhuruto kutuliza hasira za wakenya.
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Duh kweli Kenya ni kama ghetto la kina Uhuru, if my memories are active Nairobi residents should be riding on the tram 🚋 by now according to Uhuru promise, vipi huko Nairobi jameni tram riding ipo vipi?
 
I decided to be quiet for a while, I am sure My fellow countrymen clarified it to you,
That's how Tanzanians act,
Just give yourself a time to evaluate every single Serious decision, especially if you are not sure,
What if the amount Tz spent to build BRT and Kigamboni Bridge was invested in Interchanges, how many could have built?
But why did we opt for BRT first? You can Remember the way your politicians act, they want BRT, LRT, Trams and Even Metro at the same time, they don't know what exactly should start, That's a mindset of an aggressive Person, never organised,
Unakumbuka last few months you realised you need BRT and you immediately painted the Highway, you soon realised it won't work, Halafu kama vile mdau hapo alivyoelezea kuwa mmejikuta mnafikiria electrification of your SGR before you sooner realised it won't work,
Kenyans you need to calm yourselves down or you will always be subject to such reckless decisions.
Again, I may ask you, who is going to be served by your Multibillion Lamu Port, Funded by Chinese Loan???
Ethiopia?? Not even sure right?
Tulizeni Akili.
 
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