Cost comparison SGR Kenya vs SGR Tanzania

MKENYA YULE MCOOL said:
cost of Kenyan rail is high because unlike Tanzania and Ethiopia where land is under government, land is owned by individuals and must be compensated. A good example is lamu port where the feasibility study was done back in 2011 but took 4 years for compensation to be completely done.
Click to expand...

Le me put the record right...... What you are thinking that the land is owned by the GoT and whenever it acquires compulsorily will not pay compensation is no longer the case. Under the new Land Act Nr. 4, 1999 it declares that land has value and whenever eminent domain occur for public interest the acquiring authorities (National Govt, Sub-National Govt, Govt agencies) must pay to the PAPs fully, fair and prompt compensation. Unlike the former piece of legislation (Land Acquisition Act of 1957) which expressed that the land had no value. This law was repealed after the new Act came into operation.

Again I heard, contract sum is not including the land acquisition cost.
 
eliakeen the land acquisition act is of 1967 not 1957. otherwise thanks for ua piece of info. Kenyans always think land in Tz is cheap.
 
kilam said:
Labda mod kaona vijembe vimezidi akaamua kuufunga uzi. Maajabu ni kwamba mod huyu huyu utakuta naye analilia uhuru wa watu kuongea.
Click to expand...

yaani mambo yake magumu sana, unaona alivyofanya zile sticky threads kwenye Jukwa la Kenya??
 
Meanwhile the Kenya SGR is turning out way better than expected
WVzg0ZH.jpg


JOdRCl7.jpg


Qjv4Jul.jpg


dSMiqJ2.jpg
 
This one looks like some launchpad for a spaceship ..
C__Data_Users_DefApps_AppData_INTERNETEXPLORER_Temp_Saved Images_WVzg0ZH.jpg

Is that an elevator in the middle?
 
Skip to the navigationchannel.links.navigation.skip.label.Skip to the content.Africa Review | Daily Nation | Business Daily | NTV | Daily Monitor | The Citizen | Mwananchi | Swahili Hub

GO
News

Uganda, Tanzania leaders to meet for EPA talks

ALSO READ: Tanzania demands study on impact of EU trade deal

There has been criticism in other quarters that the non-reciprocal and discriminating preferential trade agreements offered by EU are incompatible with World Trade Organisation rules.

President Museveni noted that the fact that many African countries had not signed EPA shows that the proposal was meant to create disunity among African countries.

Negotiations ongoing

President Magufuli’s comments have come at a time when East African Community (EAC) countries are still negotiating the deal.

Late last year, Tanzanian lawmakers rejected EPA when the agreement was sent to Parliament for debate.

Mr Hussein Bashe (Nzega Urban-CCM) warned that EPA would kill EAC and that not all member states would enjoy the same benefits. “Some are going to earn a lot while others will see their productive sectors collapse.”

Mr Zitto Kabwe (Kigoma Urban-ACT Wazalendo) said: “We cannot allow the government to ratify the deal in its current form. It doesn’t mean that we have closed the chapter or we do not care about the welfare of EAC; all that we want is to make sure that our national interests are protected.”

READ: Tanzania EPA stance dims Kenya’s bid for uniform customs rules

Linking SGR

Meanwhile, Presidents Magufuli and Museveni also agreed on the immediate execution of the standard gauge railway (SGR) line to link the two countries to facilitate trade and interaction of people.

“The project is good for our economies and will enhance the ties that we have been enjoying for many years,” President Magufuli said.

He also said negotiations were underway for Air Tanzania to launch its flights to Entebbe.

The two leaders spoke about the construction of the Murongo-Kikagati power project to light up the Tanzania-Uganda border and stimulate economic activities. President Magufuli also welcomed Ugandan investors to Tanzania.

President Museveni commended cordial bilateral relations which have facilitated the undertaking of economic projects. “We are brothers and sisters. It’s good to see the pillars left by founders of our countries are protected for the betterment of our people.”

President Museveni said the construction of the SGR line and the transborder power project as well as Air Tanzania’s launch of the Dar es Salaam-Entebbe flights would improve people’s living standards.

He also suggested that inland container depots in Mwanza be improved to ease cargo transportation from Uganda to the Dar es Salaam Port.

War on corruption

President Museveni commended Tanzania for waging a war against corruption, saying it would increase government efficiency. He also invited President Magufuli to Uganda.

On the construction of crude oil pipeline from Hoima, Uganda, to the Tanga Port, Dr Magufuli said the two countries have ironed out all the hurdles that impeded the start of the construction of the 1,447-km pipeline.

Total has been contracted to carry out the project.

“On the part of Tanzania, there were seven issues, which we have already resolved. They include VAT exemption. The contractor can now start the work,” he said.

He noted that there was an added advantage to pass the pipeline through Sekenke in Tanzania as oil will be pumped by gravitational force to Tanga.

He hailed Uganda for picking Tanzania as a route for the pipeline because the country has experience in long distance pipelines.

“We have the Tazama pipeline which transports oil from Dar es Salaam to Zambia. We have also built a natural gas pipeline from Mtwara to Dar es Salaam. This will be the third pipeline in our country,helected said.
Terms Privacy Policy Mobile Syndication Newsfeeds Help Contact us About us RSS
 
Kenya chokes on hefty infrastructure debts to China but are the projects viable?
By Otiato Guguyu | Updated Sun, February 26th 2017 at 00:00 GMT +3 SHARE THIS ARTICLE Share on Facebook Share on Twitter

Some of the 32 standard gauge railway (SGR) line passenger locomotive wagons and engines leave Mombasa West Railway Station for Nairobi on February 2. (Photo: Gideon Maundu/Standard)

The admission that the Standard Gauge Railway (SGR) will not repay its own loans and will require taxpayers to subsidise it to the tune of Sh15 billion is a damning verdict on the feasibility of Kenya’s biggest infrastructure project.

The line has to be extended to Uganda if it is to reap any returns, which means Kenya will have to sink in even more resources in the project in both expansion and subsidies in coming years.

“The problem may be that we will have to add more money into the project than anticipated,” Institute of Economic Affairs CEO Kwame Owino said.

Resorting to taxpayers to foot the bill for the investments brings home the experience of other beneficiaries of Chinese-funded mega projects. After more than a decade of taking out huge loans to build large-scale infrastructure, most of which has not yet produced adequate returns, Sri Lanka is now struggling to make payments.

But with a debt-to-GDP currently of about 75 per cent, over 95 per cent of all government revenue is currently going towards debt repayment and the little island nation south of India is looking for alternatives. It wants to pawn off the mega infrastructure projects to its debtors, the biggest being China ($8 billion of the $64.9 billion debt).

But surprise, they do not want the empty Mattala International Airport and portions of the Hambantota deep sea port. India has also rejected an offer to take over the empty northeastern Trincomalee port under the debt-to-equity swaps. The Sri Lanka case questions whether Kenyan can provide enough exports, attract enough imports and generate enough traffic to pay for road, rail, pipeline and port projects it has embarked on. ALSO READ: Moving towards smart neighbourhoods

Copy-paste projects

A global risk firm, Control Risk, also questioned the viability of copy-paste projects across East Africa. Control Risk says with every country blindly competing to become the East Africa’s hub, the region is creating quail-like projects that cannot be supported by the business in the region.

“Regional rivalries increase the risk of over-supply. There are signs that some projects are driven less by sound economic logic than by political ambition and the prospect of easy short-term debt financing from China,” Control Risk says.

“These could prove economically unviable and even impose an excessive burden on public finances, raising longer-term sovereign risks,” the report on 2017 risks warns. While huge infrastructure projects are important drivers to African economies, the recent report by Control Risk prepares us for the case of Sri Lanka and is a wake-up call to the government to realign Kenya’s mega infrastructure projects.

Control Risk also warns that the East African region is especially too antagonistic, driven by ambition to become the regional supremo yet the success of the mega projects depends on the region staying together as a bloc.

The rivalry that played into the foiled attempt by Kenyan Cabinet Secretary Amina Mohamed’s bid to become Africa Union Commission Chairperson may be the biggest risk to Kenya’s investment delivering a return to pay off huge debts taken to develop them. The antagonism has already played out in the mega project first prompted by Kenya, which tried to out-dance Tanzania into forming the coalition of the willing to push for the joint standard gauge railway project with Uganda and Rwanda at the cost of $13 billion.

Uganda chose a Tanzanian route, saying it was cheaper, had more access infrastructure and presented fewer complications in securing land for it. This left Kenya with burnt fingers, since it had already done the Mombasa to Nairobi section and was forced to branch the project to Naivasha to gain some economic sense and get a decent return from setting up an industrial hub next to cheap geothermal power.

ALSO READ: Isiolo loses resort city in major changes to the Lapsset route

However, the Chinese who are funding the Ugandan line are reported to have taken a tough stance on Uganda, insisting on the Kenyan connection, even changing terms to ensure Kenya will extend its Naivasha line to Malaba. Shortly after, Rwanda has announced plans to develop rail links to Indian Ocean ports through Tanzania because they were cheaper and shorter than the route transiting Kenya.

Uganda, Rwanda and troubled Burundi, all landlocked, have maintained fluid relations with both Kenya and Tanzania and have made conflicting decisions that may render some of the projects unviable. Tanzania and Uganda also pulled out of the Lamu Port-Southern Sudan-Ethiopia Transport project (Lapsset) after they had strung Kenya along over alleged elites’ appetite for land in anticipation for compensations. Uganda abandoned initial plans for a joint line linking its oil-rich western Hoima region to Lamu port in order to bring down the costs of that project, which had been estimated at $5 billion by Nagoya, Japan-based Toyota Tsusho Corp, to $4 billion across Tanzania to Tanga port.

Kenya is now faced with the expensive cost of going it alone for a shorter line that may cost about $2.1 billion for the 1.6 billion barrels of oil discovered in Turkana, with potential of higher finds announced by Tullow Oil.

Control Risk also said the bilateral relations and any economic or political misfortunes in the neighbourhood also pose a major challenge. A case in point for Kenya is South Sudan, which is stuck in civil war yet it is the main upstream source of oil ensuring the viability of the Lapsset project.

Kenya may have to rethink projects that have not yet been embarked on, revoke others to concentrate on a few and work with regional countries to find short-term alternatives.

“We may need to pick up aspects of the Lapsset project that can be funded with priority of what is required and leave the rest to private financing so that we do not stretch our resources,” says Mr Owino.

ALSO READ: Newly upgraded Isiolo airport ready for take off

China, whose real estate construction makes up a quarter of its $10 trillion economy, are the mother of white elephant projects both at home and abroad, fuelling their double-digit economy by constructing huge infrastructure based on bloated future projections and not near term feasibility studies.

Some would rightfully argue that Kenya’s debt-to-GDP ratio just points above 50 per cent, making debt-funded growth sustainable.

However, this can change drastically under exchange rate shocks, which can shoot repayment levels up the roof if the shilling loses ground against the dollar.

It can also change gradually as it becomes necessary to pay back debts since the Kenya Revenue Authority (KRA) may not be able to meet its revenue targets, even as the Government expands the budget further.

China has become a significantly huge lender on the back of the SGR and last year’s budget support. The Treasury budget documents show that Chinese loans have doubled from Sh227 billion ($2.2 billion) in 2014 to Sh414 billion ($4 billion) last year. To service this, Kenya will wire Sh150 billion in the next four years to the Chinese government, Exim Bank of China and China Development Bank, and Sh21.2 billion this year alone.

Read more at: Kenya chokes on hefty infrastructure debts to China but are the projects viable?
 
16 MARCH 2017
The Monitor (Kampala)
Uganda: Standard Gauge Railway Exposes Uganda's Little Procurement Secrets
EDITORIALBy Karoli Ssemogerere
Half a year into the Magufuli presidency, it's our President Museveni who has been commuting to visit his Tanzanian counterpart rather than the reverse. In the early stages of the latest infrastructure round, oil pipeline and SGR, it was Uhuru Kenyatta being shuttled around like a foreign investor. That's very telling. President Museveni is very image conscious. If a major problem breaks out, he will take a long time before pronouncing himself preferring to let his enemies feast on him before pouncing back.

It seems that he too has decided that there is wisdom down south in the land of Magufuli and the coalition of the willing (Uganda, Kenya and Rwanda) may have been the coalition of the inflated. Tanzania's economy has been growing much faster than Uganda and Kenya. In a decade or so, Tanzania's economy may catch up and overtake Kenya. Unlike modern textbook cases, Tanzania has been in a "Brexit mode" from bad practices, runaway corruption and simply mismanagement. For all his sunny disposition, President Jakaya Kikwete did very little about these vices. John Magufuli, once a loyal lieutenant, has put his foot on all the crazy practices that were slowing down the economy. He has also done so by reinventing a very isolationist posture that saw Tanzania stick with the Tanganyika name for failure to modernise and a very suspicious attitude towards foreigners.


This change of heart is possibly welcome on a few fronts. For the first time in years, Uganda is waking up to the embarrassment of being the region's laggard. The fierce competition between Tanzania and Kenya has left Uganda as a bystander. Even Rwanda's glossy PR and ambition has overshadowed Uganda at times. Kenya's SGR was inflated but the first train from Nairobi to Mombasa has already completed its trial run. Nairobi already has the first stages of mass transit in place. Uganda is still running old carriages from the post- independence days to ferry commuters just 20 km outside town.

Magufuli has challenged the notion that big must be expensive. Economists have warned that Uganda may be tipping on borrowing itself into bankruptcy. Magufuli has become a useful watering can on the President's pride. How is he running a much bigger economy implementing more evenly balanced infrastructure developments? How is Magufuli achieving another first, buying cheaper than the Chinese dollop of concessional loans, inflated bills of quantities?



Kenyatta arrived in office after serving as minister of Finance. He like the Museveni of 1986 was blessed with youth and energy. He probably has the deepest business pedigree growing up in Kenyatta Inc., a collection of family fortune and extensive economic interests in Kenya. Magufuli is a different flavour, a chemist whose background was in the Ministry of Works. Scientists are more deliberate. He is actually a teacher. In a classroom, Magufuli may be better able to bring subtle points across that the younger Kenyatta and Ruto may not.




Infrastructure is a big thing in the world today. The British have just concluded more than a decade of rebuilding. They have announced a new version of standard gauge High speed rail to increase train speeds in the Midlands and the southwest. The Americans after a number of false starts are implementing high speed rail in the east and the southwest. There have been some not so successful examples. Pakistan after a decade of big infrastructure improvements finds the infrastructure underutilised. Terror attacks have reduced the utility of major highways.

Uganda's SGR is very ambitious, 39 stations and 962 km of track. The only missing component is mass transit in the major towns, Mbarara, Kampala, Jinja, Mukono and the towns on the northern route. The main track should be integrated with the mass transit to improve the economics of the project. Mr. Magufuli being detail oriented should have remembered to whisper these in the ear of President or student Yoweri Museveni after all he went to Dar es Salaam University.

Mr Ssemogerere is an Attorney-at-Law and an Advocate. kssemoge@gmail.com
 
You must log in or register to reply here.

Similar Discussions

Back
Top Bottom
Forums
New posts
Post thread
Back