Chinese to pay 85%of Kenya railway

 NAIROBI, Kenya – Export-Import Bank of China  is paying 85% of the costs of the proposed standard gauge railway Kenya is building.

  Speaking last week before  a parliamentary committee. Treasury Secretary, Henry Rotich said, the project will cost about $5 billion.

  He clarified that the remaining $1.6 billion will be provided through a commercial loan that will attract 4.1 percent interest and has a repayment period of 15 years, including a five-year grace period. 

   There has some contoversy surrounding the procurement process and the exact costs of the 600 km plus railway.

   Meanwhile, Maurice Juma, the Public Procurement Oversight Authority (PPOA) Director General also clarified last week that PPOA  has no authority to query the project since it is a government-to-government arrangement.

   Key people in Uhuru Kenyatta’s Cabinet say the government got a good deal from China for the project.

   About three-fifths of the rail trackage in the world is the so-called standard gauge of 1.4 metre.

   Transit costs for goods going into the hinteland are some of the hgihest in world. Uganda and Rwanda are fully behind Kenya, while also making arrangements to fund  their part of the railway that will reach Kigali.

   “This is the reason why we must view the substantial investment in the railway as a worthy investment to underpin the regional economic agenda. An economy only ever thrives on the foundation of proper infrastructure,” President Kenyatta said during the launch of the project.