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Economy

Rotich seeks MPs okay for Sh50bn Naivasha SGR line

Treasury CS Henry Rotich
Treasury CS Henry Rotich. FILE PHOTO | NMG 

The Treasury is seeking approval from MPs for Sh50.6 billion to complete construction of the second phase of the standard gauge railway (SGR) from Nairobi to Naivasha, which is 90 percent complete.

The cash request has been made through the supplementary budget that the Parliamentary Budget Committee is currently reviewing.

Transport Cabinet Secretary James Macharia, who is part of a Kenyan delegation in China seeking an additional Sh370 billion Chinese loan to extend the SGR from Naivasha to Kisumu, said the cash request is for the second leg of the new railway line.

“The Sh50 billion we are seeking approval from Treasury is for construction of the SGR from Nairobi to Naivasha (phase 2A),” Mr Macharia told the Business Daily.

Kenya three years ago signed a financing package for the 120-kilometre extension of the SGR line from Nairobi to Naivasha. Under the deal, China Eximbank committed to providing a $1.5 billion (Sh150 billion) loan or 85 percent of the required financing, while Kenya was to provide the balance estimated at Sh26.4 billion.

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Wednesday, Mr Macharia did not comment on which share of the financing the Treasury was seeking MPs approval for, adding that Parliament nod is also required when releasing loans money for spending.

The Chinese-financed project is the second stage in a scheme that aims at extending SGR to Uganda and other landlocked countries. The goal is to cut the cost of transport and boost trade, by replacing a slower, narrow-gauge railway line.

The Mombasa-Nairobi SGR line started operation in June 2017 and was built at cost of Sh327 billion with financing by Chinese lenders.

The contractor, China Road and Bridge Corporation, moved to the site 16 months ago and has faced challenges through the construction works.

This includes a court case filed by environmentalists opposed to the line’s passage through the Nairobi National Park and compensation row with landowners.

The contractor is expected to complete the Naivasha SGR line by the end of July.

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