Hon Raila Odinga has boldly exhibited his real colors. His agreement to help President Uhuru Kenyatta beg for another loan from China is one of the moves which can be described as selling the country.
Kenya is shortly expected to sign a Sh368 billion loan for the construction of the Naivasha-Kisumu leg of the Standard Gauge Railway (SGR), bringing the total debt for the project to Sh845 billion and making the cost effectively Sh800 million per kilometre — one of the most expensive projects of its kind in the world.
The cost of Sh800 million for every kilometre of railway between Mombasa and Kisumu is twice the international average.
People familiar with the trip say the new loan is a “done deal” now that the issues raised during President Kenyatta’s previous trip to Beijing had been addressed.
Phase One of the SGR gobbled up Sh327 billion before factoring in loan interest fees and land acquisition costs. About 90 per cent of this amount, or Sh294 billion, was a part-concessional-part-commercial loan from Exim Bank of China.
The Kenyan government was expected to contribute the remaining 10 per cent, which translates to about Sh32.7 billion, from the Railway Development Levy, while land acquisition was to cost Sh15 billion, but this amount was inflated and the country ended up with a bill of almost two times the amount.
Cumulatively, stretching the line from Mombasa to Kisumu will cost a total of Sh845 billion for the 996-kilometre line, making it the biggest infrastructure project Kenya has ever undertaken.
Together with interest and land acquisition, the line will cost over Sh1 trillion, which is almost the total amount of money collected by the taxman every year.
Last year, SGR operations posted Sh10 billion in losses despite costing the taxpayer at least Sh12 billion to operate. It costs about Sh1 billion a month to run the line between Nairobi and Mombasa.