Kenya’s Standard Gauge Railway Project To Cost $1.4 Billion More

Kenya’s Standard Gauge Railway Project To Cost $1.4 Billion More

From Standard Digital

The cost of constructing the standard gauge railway has now hit Sh447.5 billion after Treasury, for the first time, revealed other costs not known to the public.

Treasury Cabinet Secretary Henry Rotich on Tuesday told the parliamentary Public Investment Committee (PIC) that the project would attract additional costs including land acquisition, insurance and cost of the loan, which will push up the cost by another Sh120.5 billion ($1.4 billion).

At one point, the committee was forced to adjourn to allow Mr Rotich to get the total cost of the project after the Cabinet Secretary appeared not to have the actual cost.

The Adan Keynan-led committee started its sittings this week to investigate whether Kenyans will get value for money, establish if the government broke the procurement laws and what the actual cost of the project is.

Different government agencies have been giving information on the actual cost of the project in bits, at times contradicting each other. First, it was Sh220 billion, but this was later said to be for the civil works.

The figure rose to Sh327 billion when the contract was expanded to allow the Chinese company constructing the railway, China Roads and Bridges Corporation ( CRBC), to also purchase rolling stock — locomotives, passenger coaches and wagons.

But Tuesday Rotich revealed that in addition to the Sh327 billion, the Government will also pay Sh3 billion for the supervision of the project, Sh9.8 billion as insurance premiums and another Sh8 billion to purchase 2,253 hectares of land.

“This land will be purchased through compulsory acquisition for the railway corridor,” explained Rotich.

But the figures from Treasury on the insurance seemed to contradict those given by Kenya Railways Managing Director Alfred Matheka who indicated on Monday that the insurance would be Sh13 billion.

Written by Paul Wafula and Moses Njagih | Read more at Standard Digital