Thursday, April 10, 2008

China Pulls Road Construction Funding

One problem with the Kenya Government when it comes to building infrastructure is that it is fully dependant on foreign capital. This is always 100% financing which is away from the 80% financing in the form of a loan. So when China promises to give money to build a road and only a fraction of it gets to be delivered, then you have a situation where an elevated highway becomes an extra lane and street lights.

This is a common feature when it comes to infrastructure planning in Kenya and has been since the late 70s. I do not expect anything to change any time soon.

The current transport minister is promising a feasibility study (this must be the fifth one to my knowledge that the Kenya Government has commissioned) to be done on light rail transport and it has got a railway PR man very excited about the possibilities despite the fact that Kenya railways does not even use 60% of the existing tracks and has led even some people to speculate on grabbing the idle land. All the studies carried out before have not been implemented because of one thing, funding! Banks and donor government's have been willing to finance up to 80% of the total cost. The Kenya government has never been able to raise its 20% share of the financial package. This is the same situation that stalled the proposed Juba-Nakuru railway. When will one of our politicians come up with a way to raise funds without selling government shares of companies it owns?

Kenya's strategic geographical position is something everyone else is seeing apart from our government/politicians.

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