The problems of the China-funded train in Kenya

MOMBASA, Kenya — Fireworks popped and confetti rained down in the coastal city of Mombasa as Kenya’s president inaugurated the new railway — designed, financed and built by China.

President Uhuru Kenyatta said the new train would connect the port of Mombasa with neighboring Uganda, create jobs and help transform Kenya into an industrialized middle-income country.

“This is a very historic moment,” President Kenyatta, waving a giant Kenyan flag, told the meeting of Kenyan and Chinese officials. “We can be proud.”

That was five years ago. The railroad has since turned into a fiasco, the target of lawsuits, criminal investigations into corruption and resentment by environmentalists and displaced workers in the trucking industry.

Now it’s a hot-button issue in the hotly contested August 9 elections and part of a wider debate about China’s growing role in Kenya. The leading candidates have suggested everything from deporting Chinese workers doing local jobs to renegotiate the heavy debt Kenya owes to China. But for many, the railroad, costing a staggering $4.7 billion, is the epitome of the corruption and greed among the political elite.

China initially funded the railway as part of its trillion-dollar Belt and Road Initiative, which aimed to expand China’s economic and political influence by funding new ports, roads and railways worldwide. But China declined to fund the last stretch of the Kenyan railway – the connection to Uganda – as some African countries struggled to repay their debts.

The train’s tracks run 367 miles from Mombasa through the capital Nairobi – ending abruptly in an empty field in the Rift Valley, more than 200 miles from Uganda.

“The GSC is an economic, social and fiscal disrupter,” said Tony Watima, an economist, referring to the Standard Gauge Railway, which Kenyans call the train. “The disruption it has caused to the Kenyan economy will be felt for years to come.”

Both leading candidates in the campaign to elect President Kenyatta’s successor – William Ruto and Raila Odinga – have seized on the railway’s problems and pledged to re-evaluate operations, while also trying to distance themselves from the project.

Mr. Ruto is the vice president and part of the administration that launched the railway. In an interview, he acknowledged that Kenya’s national debt – a total of $73.5 billion in March in a country with a gross domestic product of just over $100 billion – created a “very precarious” situation and that the railway has so far had failed to grow the economy.

“We are in pain from paying the Chinese debt,” he said.

His opponent, Mr Odinga, is a former prime minister who had long been critical of the project and… accused Mr Kenyatta’s family of taking advantage. But with President Kenyatta backing him, Mr Odinga has softened his criticism, promising to review the railway’s operation. He recently told a crowd of supporters in Mombasa: “Once I’m in office, we’ll sort it out.”

The railway represents the culmination of the borrowing and looting that has plagued Mr Kenyatta’s government since it took office in 2013, economists, analysts and government officials said in interviews. His government, they said, has saddled the country with large-scale infrastructure projects that are financially unviable, largely benefiting the wealthy and diverting investment from education and health care. In the past nine years, Kenya’s public debt has nearly quadrupled.

“The standard gauge line is the jewel in the crown of corruption in Kenya,” said John Githongo, a former anti-corruption czar. “That is a sad legacy of the current regime.”

Kenyatta’s office has not responded to email inquiries for this article. The government’s finance and planning minister, Ukur Yatani, who oversees the country’s port, rail and pipeline infrastructure, did not respond to requests for an interview.

Railways financier Exim Bank of China has demanded repayments even as creditors such as France and Japan gave Kenya some delay in paying off their loans due to the pandemic. To repay the loan, the government has introduced a series of taxes and austerity measures that have infuriated the public as it faces rising food and fuel prices following a drought and the war in Ukraine.

There was a “lack of economic planning and foresight” in commissioning the railway, said Abdullswamad Shariff Nassir, a lawmaker who chairs the parliament’s public investment committee.

For years Kenya debated whether to build a new railway or renovate its centuries-old line, built by the British colonialists and known as the ‘Lunatic Express’.

Independent reports, including from the World Bank, recommended upgrading the existing rail network as a cheaper option. But in the end, the Kenyatta government decided to build a new one: a standard gauge line on which freight trains could travel 80 kilometers per hour and passenger trains 120 kilometers per hour.

Groundbreaking started in 2013. But problems haunted the project from the start.

Although it was funded by taxpayers, there was no competitive bids for the project – a move Mr. Kenyatta defended.

Environmentalists questioned why the government has run the railway through Nairobi National Park, one of the few game reserves close to a capital.

The only known feasibility study of the project was done by the Chinese contractor — not the government — which identified a conflict of interest, said Okiya Omtatah, a prominent lawyer who challenged the project in court.

He said he had been invited to a hotel in Nairobi to meet several Kenyan senators and Chinese executives who asked him to withdraw the case in exchange for a $300,000 payout. When he declined, one of the senators offered up to $1 million, he said. He was told that if he refused, they could pay a judge to decide the case in their favor.

“You keep your money and I’ll keep my land,” Omtatah recalled as he left the room.

A communications officer from CRBC, the Chinese contractor, did not respond to questions by email. Mr Omtatah declined to identify the senators he said he met.

The appeals court finally ruled in favor of Mr Omtatah, in 2020, and declared the railway contract illegal for violating Kenyan procurement laws. The government will appeal the decision to the Supreme Court.

mr. Ruto has promised, if he is elected president… publish the contract — a move activists hope would allow the public to scrutinize. A transport ministry official said this year that making the contract public would undermine national security because it confidentiality clauses.

Over the years, activists and opposition figures have accused senior politicians of: drive up costs and make a profit of the railway.

Land purchases also became a flashpoint, with more than a dozen officials including the former director of Kenya Railways and the former chairman of the agency that manages Kenya’s public lands. sued in court charged in 2018 with facilitating more than $2 million in payments to Individuals and companies who falsely claimed to own land along the railroad. While some cases have been dropped, the trials of other defendants continue. Parliament announced that millions were still paid in overpaid or payments made without clear documentation.

A year after the train went into service, a parliamentary report found that it cost more than double to transport goods on the train than on the road.

To make the railway profitable, authorities forced importers to ship freight by rail instead of road – a decision that sparked protests and lawsuits.

Officials in Mombasa said the railway cost their province tens of millions of dollars in annual revenue. A report estimated conservative that more than 8,100 people working in the county’s truck, fuel and freight businesses would lose their jobs.

Lawrence Boy, a truck driver in Miritini, a suburb of Mombasa, accused the government of “demonizing” truck drivers and making many young people out of work and committing crime.

“We are citizens of this country,” he said, “and we deserve equal rights.”

At Nairobi station, passengers board train carriages painted with the slogan ‘Connecting Nations. Prosperous people.” But an Afrobarometer poll in 2019-2020 found that: 87 percent of Kenyans believed their government had borrowed too much money from China.

Lawmakers have recommended that the government renegotiate the railway loan with China. But even if they can, said economist Mr Watima, the railway will remain a “serious mess.”

China is also rethinking its early lending to African infrastructure projects as it faces a growing resistance to lending to poor countries with shaky finances.

While China will remain the largest financier of African infrastructure, Eric Olander, co-founder of the China Global South Project, said risky, mega-projects like Kenya’s railways are unlikely to receive funding in the future.

“The sand in the hourglass is gone,” he said.

For now, the railway leaves Mombasa, traverses Kenya’s iconic national parks, tons past Nairobi, before stopping at a quiet hamlet near the town of Duka Moja, surrounded by dense shrubs and corn plants.

“They said this train was progress, but whose progress is it?” said Daniel Tipape, a motorcycle taxi driver, crossing the dirt road at the finish line of the track.

“Sometimes we build things just for the sake of it,” he said.

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