Raila Odinga breaks silence on SGR as State woos China

The Government has not abandoned Standard Gauge Railway extension to Kisumu but will complete it at a cost set by the Chinese financier.

African Union envoy for infrastructure Raila Odinga with Cabinet Secretaries James Macharia (Transport), Peter Munya (Trade) and John Munyes (Petroleum) yesterday confirmed that the Sh380 billion project was still on course.

It will, however, cost the country excess of Sh8 billion to prove its feasibility in line with China Export-Import Bank prerequisites for a loan.

A Sh3 billion industrial park is among investments the Government is going to sink funds into to woo China into funding SGR extension to Kisumu.

The facility, whose completion is expected to signal economic viability for the SGR project, will sit on 1,000 acres, with 500 acres already identified in Muhoroni.

Its construction will begin with an official launch by President Uhuru Kenyatta, Uganda’s Yoweri Museveni and Democratic Republic of Congo’s Félix Tshisekedi in August, Raila said.

Munya said Sh500 million had been set aside for its design and planning in the current fiscal year and Sh2.5 billion in the year beginning July 1.

Speaking on the SGR issue for the first time since returning with President Uhuru Kenyatta from a trip to China, Raila said they did not fail to secure the loan in Beijing.

He explained that the project would go on once Kenya met a profitability caveat, which saw China freeze funding for the project beyond Naivasha.

“I was waiting for the opportune time to give a report on our trip to China and it has come with the launch of this project (the SEZ). Media has been awash with biased reports that we failed to secure the SGR loan, which is very negative, false and unfair," he said.

“That the SGR will reach Kisumu is not in question; what we wanted to do is to ensure there is feasibility for the entire project as a prerequisite.” Macharia, who cast dark clouds on the fate of Kisumu when he said the Government would not revamp the Nakuru-Kisumu line after SGR was halted, also clarified that the Government was still keen on having the ambitious project go on.

He said the metre gauge rail to Kisumu would need at least Sh70 billion to rebuild against the Malaba line’s Sh15 billion.

“We realised that it was going to be too costly reviving this line when SGR to Kisumu was also very active in the pipeline. We are reviving the Malaba line as an interim measure to help prove the profitability of the SGR line and also so that goods destined for Uganda, our strongest trade partner in the region are not stranded at Naivasha,” he said.

Raila clarified that the planned SEZ, together with the refurbishment of the Kisumu port at a cost of Sh3 billion and upgrade of the Kisumu International Airport to launch cargo haulage were among efforts at proving that extension of SGR to Malaba was a viable venture.

Munya said the park was going to largely be a textile and leather hub, with potential to revive cotton farming in the region. It will offer counties in the Lake Region Economic Bloc an opportunity to supply raw material into factories at the park, pushing the region into an export processing zone.
Uganda, Rwanda and DR Congo will also ship raw material into the park for refining into goods destined for the European Union and Africa Growth and Opportunity Act markets.

The inspection of the SEZ site was interrupted by a mild drama when a group of people claiming to be residents protested what they termed attempts to grab their land.
“Fortune knocks once and if we do not run away with this opportunity, it will go to a different region,” Raila told them.

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