Official comments on loan status raise doubts about the fate of the SGR project



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Government officials have been speaking from both sides of the mouth since China refused to grant a loan for phase two.

A week after the end of the second Road and Road Forum in Beijing, uncertainties continue to blur Kenya's plans for its biggest infrastructure project after last week's announcement that the Standard Gauge Railway will not immediately link Naivasha in Kisumu.

During their stay in China, senior government officials tried to challenge media reports that Kenya would be denied loans to carry out Phase 2B of the RG-S.

However, some officials said on a confidential basis that the two sides had not reached an agreement on the terms of the agreement, and that questions of sustainability were being asked.

State House also denied the existence of such discussions while former Prime Minister Raila Odinga, optimistic about the railway line last weekend before the trip to Beijing, returned without doing of comment.

However, many questions remain about what happened in Beijing and the way forward for the project that combines the interest of President Uhuru Kenyatta as an inheritance and the interest of President Xi Jinping as essential element of the broader Belt and Road Initiative.

Has Kenya refused the loan? If that was the case, what was the deal breaker? If that was not the case, why is there no indication on the fate of the loan now that the government has chosen to rehabilitate the old railway? Have there been any feasibility studies on the new plan? What does it say about prospects for major Chinese projects in Africa?

The latest statement by the Ministry of Transport and the State House that the RSG Naivasha-Kisumu was not part of the Beijing talks contradicts the well-known official text.

Yesterday, the Kenya Railways website described the RMS project in five phases. Phase 2B, now controversial, is listed under the names Naivasha-Narok-Bomet-Nyamira-Kisumu and is linked to the "new port of Kisumu".

The final phase, the 107 km route linking Kisumu to Yala in Malaba, is listed as Phase 2C.

Government documents since the launch of the SGR project, up to the budget policy statement, show that Kisumu was at the center of the projects and that no mention has ever been made regarding the railway to metric route, apart from the proposed sale of its badets to finance the construction of the RMS.

"Already 85% of Phase 2A has been completed. In addition, financing negotiations and detailed plans for the construction of Phase 2B (Naivasha in Kisumu) were conducted. Once Phase 2B is complete, it will connect the city of Kisumu to the new Naivasha Domestic Container Depot to facilitate the transportation of cargo to Mombasa. This in turn will boost fish exports and agricultural products in the western region, "reads the statement of fiscal policy published in February, two months before the trip to Beijing.

When the negotiations are qualified as "completed", it usually follows the signature of the financing agreement, which was to take place in Beijing last month. But it turns out that the RMS agreement was not part of China's "priority" agenda – according to Foreign Secretary Monica Juma.

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