Oh yeah, definitely. Until the US, EU, Japan, Australia, and other European democracies steps in to help countries in need of infrastructure - China will continue to occupy the vacuum.
The award of the contract was corrupt. The team of experts that did the feasibility studies were overruled by politicians. The project was known not to be feasible from the onset. The price was also inflated. Moreover, the technical team was blindsided by the award of the project to the chinese. The feasible option had been to refurbish the existing railway, at a fraction of the cost.
China building roads, rails, ports, and power plants are far better than the US transporting drugs and arms, laundering dirty money in the same developing countries, and also stealing their oil. In addition, weren't the US accusing China of having some ulterior motive for doing all these good things that the US has never done? Like expansion of Chinese military base? Now that turns out to be a lie, and then what, Chinese project did not make any economic sense? You mainstream media should be ashamed of yourselves, nothing but lies and lies and more lies.
I am an American living in Kenya. Benefits of the SGR go way beyond moving materials back and forth from Mombasa and Nairobi. A lot of people are using it now to commute between Nairobi and Mombasa since it is significantly faster than matatus. Once extended to Kisumu, it will open up potential for mining and farming in the interior hinterlands. Right now, huge amount of food comes from Tanzania mainly due to better infrastructure connecting it. Fish farming in Lake Victoria could become a thing with the right infrastructure to quickly transport from Kisumu to Mombasa and allowing to sell on the global market. The SGR may not appear profitable from a direct revenue point of view, but it is accelerating all aspects of the economy. This will increase national tax income. It is not just about cargo fees.
Exactly.1. Basic infrastructure may not payback by ticket selling as it's pricing has to be beneficial to more coverage of ppl; 2. Brings more management skills and educational insights to ppl who have chance to use advanced tech.
I used to spend at least 8hrs on the bus at night going to Mombasa and it was always risky traveling on a two way highway full of trucks. Last year when my family and I visited home we used the SGR. Only $40 for first class, very good customer service with a lot of comfort and the travel time is half of what you would spend in the bus. Hopefully the project expands to other parts of the country. It has made life much easier.
the important question is cost of project . similar projects in india are completed under 2 billion usd . chinese companies obviously made huge profits .
@@TheJohn222222 I think over time the project will pray for itself. But was the cost inflated? Most likely yes. The deal was very shady I'm sure someone pocketed money out of it
As a Kenyan,the SGR has really helped saved time and money while traveling to Mombasa. Buses were always unsafe especially when they broke down. The problem with the railway project is that there is alot of corruption. Our Government want to have a big slice of the cake that is causing issues with the Chinese. I don't blame the Chinese....our government is just too greedy.
Yeah, it may be true, but I personally feel the return of investment is bleak. Kenya will have to pay for that just like China owns Sri Lanka and Pakistan ports, be careful. Its high time the African countries should stand on their own feet and let go of the tribalistic mentality.
To be fair the SGR has positively impacted the movement of passengers along the entire corridor from Msa to Nairobi and vice versa. It is a great alternative to the road.
I don't use road anymore to travel to the Coast, there are just way too many stupid people behind the wheels of road vehicles. I can't gamble my life on long distance road travel, especially in our part of the world. Carnages every single day costing lots of human lives.
@@pietrojenkins6901 and maybe with more time to grow industries locally it will be put to work ferrying exports to MSA as it does imports into the hinter land. But to travel on Kenyan roads is to understand the cost on lives that has been brought about the lack of law enforcement on these roads.
@@pietrojenkins6901 high speed trains in Europe make money. Commuter services don't, but that's by design. Still, freight transport must be moved back to the rails.
my god, western media are still on this railway BS. us Kenyans love the railway, it has made life so much easier and cheaper. nobody expected the railway to be profitable at once, or even ever. theres other economic value it has unlocked
@@trolllovindaddy really? Sri Lanka debt to china is around 10% of total debt Sri Lanka. 80/90% of their debt comes from western company and IMF and you guys still have audacity to blame china
Building large infrastructure is always a big risk for any Nation. However, building no infrastructure is a big failure. We shot our shot and we are growing with it here in Kenya.
It will improve Kenya's export sector. I just bought some Kenyan avocados from a supermarket here in Malaysia. Much cheaper than those imported from Australia.
Yeah. Another big problem could be killing off a big project prematurely. The SGR phase 1 is just phase 1 after all, its a shell of what its likely to be if more phases are greenlit and opened, or the whole system as planned. Phase 1 largely just connects 2 locations, but with extensions new possible trips for cargo and passengers can become viable, helping grow the economic development in many parts of the country, which in turn improves the SGR's business case. It's like induced demand.
@@drdewott9154 thankfully it seems like the current government is still committed to finishing the project. This is one of those projects whose true benefits will be realized when it is complete. That link across Kenya's major cities as well as import and export portals is critical. Once the link is complete this will be a breakthrough for the entire region. I'm also happy to see that Tanzania has made a lot of progress on their side. When the two tracks are linked we will have a circuit that will feed generations of east Africans for centuries. Despite the short term challenges, we need to think of our future and that of our descendants.
In my country railways had always been operating at lose but are maintained by the government as part of public service due to the indirect economic value it provides as infrastructure.
Exactly I can't believe what this is about... Every single govt infrastructure project is built on loans our taxes are just collateral for govt to get the loans... How much does HS2 cost? In what world can they ever be repaid by train fares. That wasn't paid for using cash UK took out loans to pay for it. When Italy gets billion from the ECB to build a trainline... No one is imagining train fares will pay for it but that the economic growth resulting from linking cities or shortening travel time alongside the improvement in quality of life for citizens over the lifespan of the train is worth it. Who on earth expects a train line to make $200m in a year. As for Kenya not being able to service annual repayments 😂 China is an export nation all you need to do is offer them greater access to market which offsets the repayment. Will your trade deficit increase with China yes but I can't name a single country on earth that has a positive trade balance with China..
@@cleanwillie1307 Indirect economic value, the train itself may not generate enough revenue to make bank but it allows other sectors in the economy to bloom. You can't export and import efficiently without a rail system, but with one the increased trade volume will generate more taxes, workers getting to their work places results in income and spending, tourism, logistics, and even the military all rely on transportation. Most transportation losses are being subsidized by governments around the world due to how much benefits they can bring.
Most times it amazes me greatly the way I move from an average lifestyle to earning over 63k per month, utter shock is the word. have understood a lot in the past few years to doubt that opportunities abound in the financial markets, The only thing is to know where to focus.
@@thomasnorris7285 Wow buddy, that's more than a mouthful of profits you're making. How do you achieve this feat consistently? You must be a genius in trading.
@@ebonicalbert5711 Anyways not actually, what I know about trading almost borders on zilch lol. I make huge profits on my investment since I started trading with Mrs Debbie Ramirez, her trading strategies are top notch coupled with the little commission she charges on her trade.
My only question is why are the white guys so "keenly" interested 🤭 after looting the continents for centuries sold its people, I think they are definitely "genuinely concerned" out African people right?
This video doesn’t cover all sides of the story. The SGR project is meant to have long-term benefit, even if it doesn’t pay for itself in the short-term it still has major long-term economic benefits, especially as new markets and complimentary infrastructure is developed over time. This video also fails to mention the benefits provided to the people of Kenya by the passenger rail service of the SGR. Maybe instead of trying to push a narrative of China Belt and Road world domination you should actually look at what these projects are accomplishing and how the people benefitting from these projects feel about them. Western countries could be doing much more to help Africa develop it’s infrastructure but instead they are trying to villainize China for providing the economic support they fail to give.
Build giant infrastructure, the economy does not immediately jump up 5000% within 12 months to take up 100% of the built capacity. Why do we pretend to be surprised by this. This is stupid. Demand will grow. Because economies don't grow instantly. It will ramp up.
The problem with these economic assistance however are the contracts China offers. What benefit do these projects give if the countries default on the loans and China regains control of the infrastructure? Many countries inevitably end up paying huge loans for nothing.
@@coolhippies1533 it still far more better than default on IMF debt, if your default on IMF debt your country are force to cut spending and privatize many of state industry. And even IMF could potentially influenced the country politic. And most of those IMF loan are end up on the corrupt politician, and leaving nothing to ordinary citizens Chinese loan on the other hand still give you an infrastructure that ordinary citizen could use and benefit from it
I believe every Kenya is proud of having this SGR. It is their railway. They now has a rail industry employing thousands of people. There have been a lot of videos on young Kenya girls trained to be SGR drivers or engineers and technicians. China is the main lender who may lose money but Kenya always wins. The funny thing is I think China doesn't mind at all because it has donated hospitals, schools, university, sport stadiums, parks, Africa Union HQ building and CDC to the African nations. China is there to share future together.
Lol.. Kenya really benefited from this Chinese loan. Now they have a regular seat at the IMF table and their public is partying on the streets. All thanks to China
It's not even 2 years since it was launched and our negationist friend living far away from Kenya knows more than us that the railway isn't not profitable. It's not always about financial aspect but the chance to connect A,B to C and Unify the country, even in China some routes aren't profitable but they are essential
They cannot decouple the usefulness of SGR to the citizens of Kenya outside the prism of capitalism. The imperialists are always dogged by this one trait because as long as they are not monetarily benefiting from it or see how they can milk it, then it is a useless endeavor.
Irrespective of the view that China is putting countries into debt I think infrastructure development changes the economic prospects of locals much faster. The US has been exporting military hardware rather than focusing on infrastructure development across the globe. It just doesn’t work long term.
Agreed. Western Analysts should be wary to do genuine comparison of what the Chinese are offering versus what Western Capital has offered and achieved in Africa. "Placing countries in debt" is not a worsening of terms, that's merely the Chinese doing instead of a Western entity. The question is: "Whats the trade?" Infrastructure is a better trade than military hardware or possibily defoliating and corrupting nations for natural resources.
Conveniently ignoring all the relief, education, and smaller site projects America funds abroad, which aren't so flashy for local politicians and in fact tend to work against entrenching the incumbents by breaking down tolerance for corrupt governance.
@@doujinflip build schools to brain wash the populace is good , supply weapons to them , regime change . Rinse and repeat. No wonder Africa is the way it is … 🤦♂️
Maybe you guys from the "first world" think just you deserve a comfortable transportation. Saying $200M loss in 2020 is a bit dishonest when you forget to mention the pandemic. Imaging that there were no roads between those two cities could be ingenuous not to justify the investment. But no, it's just the eternal racism rich country people and WS journalism throw away. An investment of this magnitude takes years to pay itself and to work on. What a terrible article!
Exactly. These privileged few enjoy good transport (except the Americans who might get a HSR next century), and yet they just don't want to see poorer countries develop. It's in their mindset that poorer countries stay poor.
You're completely missing the point. WSJ is a FINANCE and INVESTMENT focused media organisation. The main focus of the article is not to say that the SGR is a failure objectively; it's to report that the project was expected to be profitable, and ultimately wasn't, and serves as a case study of to explain why the Chinese government is now scaling back its BRI plans. You see? You're just choosing to take offense from this factual report, which gives no opinion on development or transport quality, as that's not what the report is about.
@@AGP335 . Sorry, I have to call you out on this. WSJ is not just "a Finance and Investment focused media". Truth be told, it is has been at the heart of US domestic politics, as well as geo-politics in recent (circa since 2008) years. It uses pseudo economics metrics to be fanboys of QE 1 , 2, .... when Bernanke, Yellen, and Powell wanted to gather a "posse" to justify them. Now, the "mis-deeds" are coming home to roost, as we are at the cusp of an inflation beginning with only a reportedly 8.9%. Anyone who thinks that WSJ is not un-objective in their opinion pieces disguise as reporting, kindly note that I have a planet to sell at a price you can well afford. Interested?
I am Kenyan and we love the SGR. It is now making money and phase three to Uganda is now starting. The project has greatly changed the country, for example, promoted other sectors like tourism.
The US has been claiming that the BRI is a debt trap and highlighted the woes of Sri Lanka as a typical example. But only 10% of Sri Lanka's debt is owed to China. The rest is owed to Japan and institutions in the west like IMF, World Bank
The debt-trap narrative is indeed false; however, China did undeniably contribute to the Sri Lankan crisis more than other international lenders. This was not out of malice as some suggest, and China should not be villanised for this, but it was rather out of lack of scrutiny - they approved massive loans for extremely short-sighted and sometimes straight up corrupt projects in Sri Lanka, such as those in the former President's home province, including a massive container port, international airport and stadium, which have all been pitifully underused since completion. It was evil of the Rajapaksa family to be so corrupt, and they are the ones to villanise for this. However it was also clearly irresponsible of China to lend out their own bank's money and bring a developing country under a higher debt burden for the sake of extremely silly projects.
Japan is also 10%, world bank also about 10%. Almost half is market borrowing where the sate issues bonds etc to borrow. Chinese loans are offered at very high interest rates and impossible conditions, stop fooling people mister Steven🙄
Shortsightedness -- this is exactly why the US has such shitty infrastructure while printing money to fund meaningless market speculation. A railway is supposed to be used for decades. It'd be a miracle if it starts to be profitable in just a couple of years, even in a developed country. In fact many infrastructure projects are never profitable by themselves, because they don't profit directly from much of the economic value they create: it's not like a railway station or an airport can collect taxes on the businesses pop up around them. And lastly, as a Chinese national, I find it hilarious that nobody seems to understand the exceedingly simple business model of B&R. It's not an investment program. It's selling infrastructure via financing, just like how houses and cars are sold around the world.
Shortsightedness is not the only thing. You forget about many other things. Who will use it. Who will pay for it. Who will build it. How much it will cost. How safe it will be. How it will benefit society. What will the reaction by the public be after the first year of service. Many many factors. Also will the government allow for it. Checks and balances are supposed to help the citizens of the United States, but the Senate in the federal government really causes the lack of progress for the United States because the United States has been so divided since the '90s.
When you rely on one group of the federal government to decide whether or not a project gets the green light or not, and that one group is divided in and of itself filled with people with their own self-interests that disagree or that don't understand that have the ability to cancel any given project or proposal, that's why the United States is so far behind.
The B&R... "It's not an investment program. It's selling infrastructure via financing, just like how houses and cars are sold around the world." Though it's not an investment program, the Chinese government does expect big returns of benefits after the B&R is complete. One thing that they expect is more money for energy or ease of access for energy to be brought inside the country. Easier trade more trade with countries that are connected to China via Belt and road. And also legislative influence and power through relations with the belt and road. Countries that have shaken hands with Chinese officials that agree to allow China to help their country will be more likely to vote alongside what China believes. Which can have a huge impact in the future.
Really well said, the economics of infrastructure is different from other kinds of business investment. This video does not tackle the long-term benefits of the project. There was also no mention in this video of the passenger rail services provided by the SGR which have been very helpful to Kenyans
@@TheGuggo Yes, when kenya become more develpped than China then chinese will be happy calling Kenyains to build things in china to help it.. like chinese are doing now in Kenya
Ths project was finished in 2017. So, when you say it hasn't paid for its self, was it supposed to recover the entire $3.8 bil cost in just 4-5 years of operation??
Projects like this 30 to 50 years is realistic time scale. (edit) but for modern peacounters and paperpushers everything more than 7 years is too long.
In defense of the SGR railway ... It's has really improved transit btwn the 2 cities and was a huge success ...it may not have been profitable but you can't compare such huge infrastructure that will be there even after the debt had been paid .it's not always about profits it all about long term economic growth. Plus the Imf and world bank never invest their money in infrastructure . Atleast people can see what they are paying for with the SGR .
And also most of IMF debt are not effective because many of the fund are corrupted by local politician, at least Chinese loan are creating an infrastructure that an ordinary people could use and benefits
This is not true. SGR did more harm to economic growth than benefits. 1. Opportunity cost. Could that money have been used elsewhere to produce greater economic benefits? 2. It ruined Mombasa's economy. Cargo trucks owners went bankrupt. 3. It made transport more expensive. Transit via cargo is almost half the cost of transporting via SGR. 4. General corruption. The contracts are still privates but we had information that over 1.5 million was used monthly on credit. Land compensation was also full of corruption cases. The SGR in the long run will drag economic growth unless its profitable. We don't have endless resources to support such white elephants
So if I understand correctly, WSJ did this video without interviewing any of the government from Kenya or China, and they got all the information from internet? Damn, is this how journalism being done nowadays?
they don't care, westerners just like to say and hear bad things about china, that make them feel good because it easy their unsecrty toward china.. and the media in the west just answering the demand.. this is why you see high views on such videos
Let me put it this way: despite attempts by Western media to criticize ambitious projects like China’s railway development in Kenya, Western governments have yet to offer a comparable alternative to Belt and Road Initiative projects. Joe Biden once proposed that democratic nations should launch an infrastructure plan to counterbalance China's Belt and Road, but that promise has yet to be fulfilled.
@@WJV9 There are a number of private properties still in the highways/motorways in China as the government and the property owners failed to reach an agreement, though the government had raised the compensation. Do you have any examples that 'confiscating private property'?
Why is the West ALWAYS engaged in anti-China propaganda. Why? This video is a clear example. "Oh no...China invaded Africa. Only white people are allowed to do that."
I'm a Kenya living in New Zealand for 20 years now. I have to connect 2 trains to Auckland city and it takes almost an hour and a half while it takes less than 30 minutes if I drive. I traveled from Mombasa to Nairobi years back.The train used to leave at 8.00pm and will reach it's destination the next day at 8.30am. So now with SGS it takes only 8 hours that's progress. Stop this nonsense man!
I suspect that this is being financed essentially off the back of factory workers in China. If you look around the world, there are a huge number of railroad lines that have been abandoned rather than carrying people and cargo. America has one of the finest freight railway systems in the world, but driving around here in Colorado, it is easier to find abandoned track than the lines that are still operational. It used to make sense to run track to modest sized factories but no more. That has been replaced by containers traveling from China.
Lol.. Kenya really benefited from this Chinese loan. Now they have a regular seat at the IMF table and their public is partying on the streets. All thanks to China
@@stickynorth Railways are railways. Many formerly profitable lines are abandoned. This idea that railways are necessarily beneficial eventually seems to be questionable, given how many don't even get maintained. This idea that they are "beneficial" for social reasons is the same used to justify building sports arenas that get abandoned when the next project comes along.
Even Amtrak in USA doesn’t make any profit !!! Majority of lines in US are private with monopoly! Meanwhile Ruto messed up tho Railway was built and running well before truckers killed rail transport!!
you look from a business man point of view, that is it has to make money. The problem with this thinking is public infrastructure is not meant to make money but to serve people and to stimulate economy which in turn will result in economy growth and as a result government tax revenue will be bigger . How about dam,highway, bridges. Should government make profit out of those? Those three above lose money but is needed to stimulate economy. China has been doing this method sucessfuly since 40 years ago started with normal rail network. Public transport is subsidized by government to provide affordable transportation for people. Isnt that what government supposed to do? To serve people and not to make money out of them ( business man thinking) China is not purely capitalistic. Using US logic than all fast railroad will never be built at all. It is no wonder why public transportation in US poor .Take a look at NYC subway and compare it to nanning (a 3rd tier city in china) subway. The contrast is like heaven and earth.
@@alanlight7740 "America's passenger rail is not profitable." passenger railway service is never profitable; it is not even supposed to be profitable; only in screwed Gringo minds
There's no point if the railway doesn't reach thoses so called mines or transport hubs is it What happens if it cost another 3.3 billion dollars to build that infrastructure The railway is losing 200 million dollars per year now and still owes 3.3 billion dollars plus interest This railway was nothing but a debt trap in the ccp favour from the start
Lol.. Kenya really benefited from this Chinese loan. Now they have a regular seat at the IMF table and their public is partying on the streets. All thanks to China
This has worked OVER and OVER in China and elsewhere. Here in AMERICA we were once excited by things like Transcontinental Railroad, the Golden Spike and all that. We found it worth doing as a bunch of private ventures, how much more as a state-owned enterprise?
I heard about the Chinese debt trap since 2013, but why are a lot of countries still dealing with China that makes me wonder if is it the truth about that.
Most infrastructures are not because it’s not pure market good. It is the responsibility of a government. You don’t always measure simple financial ROI on infrastructure investment.
In case of Kenya, I think the US is sabotaging and badmouthing the Chinese effort. Did you know that it was the US or its stooges who blew up the nordstream pipelines just couple of weeks ago? The US will do anything to desperately keep itself at the top, but time is running out.
I think the point of the video is that the railway was built with the idea of being profitable to pay its loan, but it hasn't for several reasons and someone need to pay the debts. And it isn't only about Kenya but also about how China financed projects without enough consideration and its hurting its own bank's finances either though defaults, write-offs or refinancing in a moment when its economy is struggling with other issues. Also, how BRI isn't going to repeat this kinds of plans on the future.
@@EduardoEscarez Kenya’s Chinese debt constitutes less than ten percent of the overall national debt, Kenya is a middle income country which can sacrifice and pay the total Chinese debt in a year if worse comes to worse. There’s no time that Kenya defaulted to pay its debt obligations. Kenyan government decision to go for the project was purely for the long term benefits and not short term. The west still angry for not being given the project
SGR Will expand to Uganda, Congo and Southern Sudan to conquer the region. This is the best thing that ever happened to Kenya. The current problem is due to Politics and change of government but the new government has no choice but to follow up with dept payment. Kenya was amoung the few Countries that benefitted enormesly from China belt and Road project since our economy was ready to expand. Not all countries had the same chance.
When was the last time USA built a 600km railway out of nothing? 1880? This railway in Kenya is just the first step to finally industrialize Africa by force, so that their stone age life will change. You can not feed and deliver goods to 1,5 billion africans with stone-age methods or undermaintaned colonial infrastructure. This is why it´s very important that China controls everything, so that Africans can´t destroy what was built for them.
long term the rail line will no doubt be beneficial, it is early to judge, for cargo volumes logistics might be a problem but eventually it will be resolved. Kenya is a very populous country, Nairobi and Mombasa are very big cities, there is great distance and people inbetween them, it just cannot go wrong if it is well managed
The Western media is stupidly obsessed with blowing out of proportions a few challenges here and there. These projects are very viable. Watch this space.
This story would be more interesting if it mentioned how much cargo needs to be transported to the coast from Nairobi, and whether any company could have built a railroad of the same quality for less.
They did. There’s literally a graph that shows that they are currently transporting about 1/10th of the cargo they need to be hauling. And “quality” is not exactly something that Chinese construction is known for. You can see the leaning skyscrapers and falling viaducts and buildings that Chinese construction companies have built both inside China and internationally. It would be trivial to match that level of “quality”.
@@TohaBgood2 That's not quite what he was getting at. He was asking how much cargo, by every means, goes along that route. If you need to send 90% of it by rail for the rail line to be profitable, it probably isn't going to work out. But if it's only 10%, that's achievable. That being said, I'd be willing to bet that China was never overly concerned with whether or not the line makes money.
@@dgthe3 - Exactly! I also agree that China isn’t interested in whether the line makes money. The Belt and Road Initiative seems mostly about political and economic influence, not profit. Also, it seems counterproductive for China to make low quality infrastructure because the point is for developing countries to look to China for their infrastructure development.
@@TohaBgood2 You are just imagining from your poor stereotypes. You are just using that several cases repetitively and that’s everything you could imagine of. Which country does NOT have engineering disasters or corruption issues? I’m not saying China is better in containing corruption but reminding you that the amount of infrastructure built in China every year is higher than the rest of the world.
@@Propapanda0213 I'm "imagining" from a leaning Chinese tower in my home town that is now costing nearly triple to fix! Otherwise that tower will fall on other towers and on a multi-billion dollar train station! And the question is not if engineering mistakes happen. They happen everywhere. The question is about the utter disregard for safety and sound engineering practices that Chinese firms practice. Those firms are bred in a non-competitive internal Chinese market where everything is decided by nepotism. And we see how that makes those firms incredibly corrupt and incompetent. They're just not capable of sound engineering in a competitive and safety-minded market because they have literally never had to do it in their own country.
First of all, the railways are not something for profit. But it'll create more job opportunities in other ways such as repairing yards, cargo and port related jobs, supply chains, reduce the use of fuel ⛽ for truck transportation, etc.
Railways opened up economy's all over world,people can travel quicker, long-term binifits for country, quicker safe transport. Amazing engineering connecting two city's, eventually will be paid for.
The British built the first railway from Mombasa to Uganda for free. After independence, all they had to do was to maintain and upgrade the rails like the ones in European countries!
There is nothing they did for free.What about all the resources that were extracted from the interior & transported using the line to service the thriving British industries at the time?
@@alexandermutune6131 lol...the same owners who would sell their own people for tortoise shells, liquor and sweets? How do you know our ancestors, who didn't know the value of ish, didn't sell those resources for dumb stuff again?
Belt and road is a scam to extract resources. Why is it that kenya and every other country is contractually obligated that chinese companies build the projects using Chinese workers. No African employees. So no benefit to local economies. These projects are rarely ever used just like homes and apartments in China itself. $200M loss per year is just the start. Just wait until it has to be repaired by Kenyans who didn't build it and who don't work on it. It becomes a 3 billion dollar piece of trash then.
Are you guys blind? The project is making 200m$ loss per year. Project is made with Chinese items, Chinese loans and Chinese workers. And Kenyans paying interests to china as well as paying up losses. No idea why Africans getting trapped to china even after they saw situation in srilanka, pakistan...
@@richardarriaga6271 even if it was a no bid contract, the railway is already built though and is already functional. Even if there was bidding, that won't suddenly increase the amount of freight that will use the railway service.
@@richardarriaga6271 Was the price inflated? How much would others charge to build similar railway? How much from Americans or Europeans or Japanese, Koreans? Maybe the Chinese were too low for others to make money.
The question is how the railway impacted the GDP of Kenya, not whether the train is profitable. Railways add $17 billion USD to the GDP of the Canadian economy despite the CN railway operating at a loss sometimes.
The SGR is a good idea only that the section done is too short and captures a very small catchment area or zone. Had this line gone all the way to DRC and in particular Goma DRC and Kisangani DRC not forgetting it's northern route to Juba south Sudan, then it would be a viable opportunity to open all sectors including tourism. The opportunity is still there but there was underinvestment in terms of extent of the catchment area. By the way, who hasn't noticed that local tourism is at it's highest and nearly all year round at the coast of Kenya ie diani, watamu, Mombasa etc. This is courtesy of the SGR Kenya.
This guy gets it. Infrastructure has multiplicative effect. Building transportation from A to B may be a little useful. Once you've also built transportation from B to C, then the A to B section becomes very useful. If you Then build a section from C to D or from B to E, then A to B becomes extremely useful. However, you need to start somewhere. Africa needs to go through this painful process where each section built will only seem a bit useful, but once everything is connected, Africa's potential will explode. China has unlocked the world's biggest e-commerce market as well as huge domestic tourism, plus a huge number of business men are traveling all over the country searching for and creating opportunities. This is all thanks to investing in all sorts of infrastructure from transportation to internet connectivity, and one day Africa will reach this point too.
But 80 percent of cargo from Mombasa port is for Nairobi and it's environment. Why spend billions of dollars loans for 20 percent of cargo to other parts of Kenya and beyond?
Just like roads, water, electricity and public hospitals, the SGR should be treated as a utility not at how much money it makes. SGR is a public utility and service to people. I have just returned back from Kenya. I spent 9 hours and USD13 on the road from Nairobi to Mombasa, it's a super risk highway with trailers. Anything can happen on that road. My return journey on the SGR was 4 hours shorter safe and costs 5 dollars less than travelling by road. Reaching Kisumu and Kampala, will quicken movement of people between those countries
It often takes a long time for projects like this to pay off. And from what some of the other commenters have shared, it appears to have yielded serendipitous benefits that may improve local life and the economy overall. Lacking knowledge of the history of great projects, I couldn't say how long it took for the Hoover and Aswan Dams or the Brooklyn or Golden Gate Bridges to 'pay off'.
All I can say is the line from Vientiane to luang prebang laos has been a huge success. People there use it everyday. I've used it several times. Always on time and very clean.
Do your research on IMF and save us your ignorance. IMF doesn't fund grand projects..they help countries manage balance of payment difficulties and chip in when international financial crises happen
@@georgepresley5120 please do your research too.. Most countries can’t get out of the debt trap from IMF Neither are good but. At least China gives people a bridge or railway. The public can use!
@@AR21 IMF can't give you a bridge or a road but it's the institution you will run to when you fail to pay for that bridge or road. The Chinese give you expensive loans with conditions that only benefits them. The SGR was funded by the Chinese,built by the Chinese and with Chinese materials. Even the staff running the SGR is Chinese
The sinophobia in this comment section is appalling. China is doing what the USA and the IMF have been doing for decades. Since when are you all staunch anti capitalists?
On a national level it should pay for itself, in terms of direct and indirect benefits. My understanding is that is also in question. It's all just running way too far ahead of places like Kenya being worth connecting on this scale.
Your comment is largely true. The question is whether the cost, including the losses, is worth it. If it still costs more to move cargo from Mombasa to Nairobi than from Shanghai or Miami to Mombasa, when cargo transported by truck is cheap (much cheaper than by truck), then there is no advantage and Africa will remain uncompetitive in trade, which is the tried and tested path to economic strength. Simple arithmetic can be applied to see if the price was too high, the loan term too short, the truck lobby too strong, and the passengers too few to cover maintenance and operating costs. Kenya should have built this basic infrastructure themselves.
@@stevensmith2078 That is the difference between the western and Chinese attitude towards roads and rails. Hundreds of trucks and the fuel cost plus the deterioration of the road and the vehicle can never be cheaper than by rail. If it is the other way then it is to do with pricing of the services. The most important benefit of the new infrastructure is the economic development it brings. The land value surrounding every station is guaranteed to rise possibly 10 times. New towns and cities could be developed. The new tax revenues from the passengers and the freight earned by the government are real benefit but are not on the SGR's book. The gain in economy associated with the SGR is impossible to calculated. The SGR spawns a new rail industry that provides hundreds and thousands new jobs in management, operating, signalling, maintenance, training centres and repair shops. The technology transfer itself is also substantial because Kenya now has to master the complete system. When China tried to buy the Germany's HSR system the cost of technology transfer was same as the HSR itself. A BRI project is win win arrangement. If China loses out that means the host country wins more. The overall result still fulfils the spirit of the BRI. China is doing a lot of things for free in Africa. It built schools, water supply systems, hospitals, sport stadiums, a CDC centre and the African Union Head Quarter as gifts. Most free donation of Chinese vaccines end up in Africa. Since 1963 China has been sending medical teams to provide free medical services initially to Algeria and later to many African countries. Today there are 45 to 50 medical teams still operating. It might have nothing to do with it but the African continent with 54 countries put together still has less infected cases and covid deaths than the US. It has been like that since the covid started! Kenya is building the SGR itself. China is assisting in whichever department Kenya needs help. You may have not seen the youtubes videos of Kenyans being trained in their SCR trains manufactured in Chinese factory or the drivers trained in China's HSR system. In a nutshell a lot of China's own HSR lines do not make profit and a few wouldn't even be able to pay for the electricity consumed but China is still building them to suit its development plan which could be 10 to 15 years ahead. You can dispute it but the Chinese experience is to be come better off the first step is to have the infrastructure available.
@@gunsumwong3948 The SGR is a great idea. Infrastructure needs to be built (and maintained) first. I promote that and that is not the problem. The problem is that the basic infrastructure, which is not complicated, should be built by Africans. The complicated technology of the trains is built in China, which is fine in the short term. Are Kenyans, Africans engineering the trains in China and getting technology transferred? This is what Africans should require and what China did. Do you disagree? Learning to drive a train is not transfer of knowledge and is less than flying an airplane (as if pilots flying Boeing and Airbus planes is knowledge transfer. Delete that nonsense from your post). The issue is one of cost of the line, it not going to where the demand is, the loan repayment period being too short, etc. Please keep the propaganda. My comments are not anti-Chinese, or pro-West. They are pro-Africa and I will continue to point out issues where they exist.
US companies and government officials are forbidden to pay bribes. China has made big strides in stopping corruption internally but overseas it is just a tool in the kit. Maybe China is more realistic, but when I was working for American companies around the world, I was proud to hear people say, something like, 'these are Americans, they can't pay bribes.'
CalTran in California USA requires 80 % of the revenue to come from State & Federal funds. Although a ticket from San Jose to San Francisco cost $20, the real cost of the ticket is $100 (the same as an Uber drive). Can you analyze other US railroad projects and actual revenue models? Africa seem the same as the US.
Would be great to understand a bit more on the financials. If the SGR made a 200M loss, then how is it that the debt decreased to 3.3B? Is it possible that SGR paid back 300M and therefore made a 200M loss?
Loan repayments are treated as balance sheet items not income statement items. The interest on loans issued is recorded as an expense however. But, in government accounting, they may sometimes take cash payments for loans as part of annual expenditure itself. That’s why they often record “surpluses” and “deficits” as opposed to “profits” and “losses”. Would be worth digging further into the public documents. It may be a USD 200 million “deficit” and not a “loss”. That said, continuous “deficits” are not a good thing either; the money has to come from somewhere!
I am Chinese, not a bot. I hope this SGR could be profitable early for Kenya. As an infrastructure, it offers a choice for people living on the land, and it will change the movement of people, and goods, the same as things happened in China. Some focus on the future, and some focus on the present.
@@petergreen5337 Debt isn't a bad thing if you have revenue or a business plan to pay it back. Debt is bad when you have no bid contracts on a project that has no business case at all to ever be viable. It is astounding you can't figure out the difference...
The Jubilee Line Extension generated an aggregate land value uplift of 3.5 times the construction costs. London Overground and Crossrail have given rise to property booms along the routes. As far as I know they have not been measured. These projects are a massive giveaway to property owners. Same on the South Coast. Train services were restricted due to the bottleneck at Croydon. After it was rebuilt in the 1980s the trains became more frequent and reliable and more people started commuting. House prices in Brighton then shot up.
The problem is the corruption in the Kenyan government! The moment you remove competition for the tender, that means you just threw money away. Not being able to connect the railways to Uganda and Rwanda, will definitely result in not having enough containers to ship, hence the loss.
@@funfab9146 No offense intended. Here in America, we see so many projects go over-budget, beyond schedule and/or unfinished, it was encouraging to hear about a project going better than expected. As to debt, we have more than our share of experience with that as well.
Kenyans love SGR and use it daily for cargo and passenger services. So far they're making profits which keeps increasing yearly. The only problem is that the train can't go upto Naivasha inland depot since it was shut down by the new president with claims that's it was a waste of money to move cargo away from the port to farther inland but it made it easier for Uganda to get their cargo faster from Kenya
How can they be making a profit if the railway is losing 200 million dollars a year ? Plus still have to pay back 3.3 billion dollars plus interest ? So how is that in any way making a profit ?
The road to industrialization is painful. Initial outlays are expensive and take time to reap off from. Ruto's hasty decision to revert port operations fully to MSA is an indication that his vision is not about industrialization and increasing cooperation between regional countries but is really about winning the support of MSA voters. Shortsighted and Sad!
@@bloggtalk5085 especially those debt are in form of infrastructure project, I would say that indirect benefit are outweight the cost of the project. Even the raise of land value alone could potentially cover the entire project
France?! What the west African’s did to themselves for Portuguese coin was awful and extremely destructive and has destabilized the entire region ever since! The actions of the agents of Belgian king Leopold II in the Congo were insane, aggressively inhumane and near genocidal! but surely the worst influence on Africa has been that of the Arabs and the Islam they imported to Africa. When one looks at the countries of Africa today, the Islamic countries have far worse human rights, violence, development and governmental stability. An excellent example is Nigeria: it’s mostly Christian southern realm is largely stable and relatively well developed, but it’s mostly Muslim northern realm is dilapidated and overrun with violent jihadist groups. The lands of North Africa should be wealthy, stable, developed and powerful since they are close to the trade hubs of the Mediterranean, Suez Canal and west Asia, as well as having a climate desirable for the production of many valuable crops, large and stable populations, easy access to fisheries, diverse and vibrant histories of advanced societies as far back as 900BC, and even large reserves oil and other hydrocarbons! Instead, they are lower-middle income countries with oppressive, authoritarian police state regimes, abysmal conditions for women, SLAVERY even today, weak educational systems, weak government institutions, huge populations of migrants attempting to flee and creating humanitarian crises and political disasters for the European states unlucky enough to have them flooding their shores in cheap inflatable rafts, rampant corruption and rampant violent Islamic terrorism. ALL of these problems can be directly traced back to the influence of Islam, sharia, etc. on the people and the state.
You left out the most important part. It's something like if Kenya can't repay the loan, China takes over control of the port of Mombasa, which they can use for any purpose, including military.
In fact, acquiring a port in East Africa may have been the main goal of the SGR. The Chinese probably realized that the loan could never be repaid. $3B for a major port seems cheap.
@@zeedykim9096 lol....😂🤣😂🤣 where?! We've just defaulted from paying and have been fined 1.3billion. We are enslaving ourselves again just cause our men can't build and develop like the white and asian men. All those studying engineering what have they been good for in Kenya when you still outsource the service?
USA has Trillions of debt more than the what Africa (continent) owes China. NOBODY TALKS ABOUT That. Africa is changing in a hands with China since USA/UK fail to make the deal fair and convenient to pay it back. Korea and Japan too are investing more than before in Africa
If Kenya borrowed in its own currency, it too could have options. But it is near the limit of the debt it can service. The most economically viable projects should be built first.
All this means is that the debt will take longer to pay off.Atleaast the railway is operational but not as expected.Not only small but also greater nations have debt.So lets not make a meal out of it.With increase in population and infrastructure comes increase in demand and supply which eventually boosts the economy.Also remembering that there are other modes of wealth creation in the nation which aid in lessening the debt not solely the SGR.We are grateful of chinas support to african nations and not exploiting us like other great nations do.Lots of love to my country KENYA.
Lol so if you can't afford to pay for a car in your head you think u will be able to keep driving it? Trains break if SGR cannot keep up with payments how will it keep up with maintenance? Already the stations are starting to show signs of neglect
@@u-know-this only narrow minded people think like u do.U act as if sgr is the only bread basket of Kenya.Dont bring controversy where there is none..u can't stand that Africa is rising and its riots growing deeper...
Plus we have the commuter sgr train which is gaining traction amd performing quite well...The cargo freight train might be struggling but will surely pick up ...We are not worried as Kenyans ...
Let's hope that WSJ has the capability and motivation in reporting the successful and "not-so" successful things that the western countries have brought to Kenya and the rest of Africa in the last few 100 years...
Railway is a public infrastructure which meant not to be profitable … the economic expansion and growth will indirect benefits the tax coffers of Kenya
I recall a Chinese railway worker in Kenya pointing out to some locals that Kenya had a rail infrastructure which was better than China's at independence but instead of developing it and improving it, they let it fall into an unmaintained mess. So, China has to come along and lend it the money to buy Chinese materials (when some could have been purchased cheaper locally or on the open market) and Chinese expertise which again was available from other sources and could have been open to international tender. This a classic debt trap, Kenya will never be free of Chinese debt which can be used as a lever for much needed political support. Neither the reporter nor commentators mention that 20 people were arrested on corruption charges related to this project. Kenya would also do well to examine the many 'tofu' projects in China in which money is siphoned off by the substitution of cheaper materials and less material than quoted for and subsequent collapses of buildings and bridges. When it stops being shiny and new, it might well fall apart.
There is a huge concrete plant in Kenya, but I noticed that the local concrete is fairly weak and crumbly. Maybe they are using bad water (high in salt), but I suspect the concrete itself is very high in impurities. If you look at the SGR, you can see the concrete is very smooth and high quality. I suspect that is why they imported the concrete.
Well stated and thank you. I will look into these 20 arrests. It's amazing how Foreign influencers are used to give God status to Fascist Xi. Yes, they are fascist but just about pass the communist test also because of their strict rules over property ownership. Of course they will not admit to being Fascists.
China and Africa(Kenya) bond is different from what the media things it is. All the major infrastructure projects done in Kenya we've had a helping hand from the Chinese in cooperation with our local companies and government organizations
> The western railways in the United States were largely built with foreign debt, with land given by the government for each mile of track laid. But you can't buy rail with raw land, which is where the foreign debt came. And those railways were hugely overbuilt, and struggled to attract enough freight to make them profitable for many decades. Often they went bankrupt ---repeatedly.
As long as the financial World is literally controlled by the Western World, there's little chance in truly developing the Global South under these circumstances. The best way to hedge your bet against incurring massive debt is to accumulate USD. However that is difficult to come by without steeper cost. A MultiPolar financial World with regional nodes is the best solutions to these matters.
That will never happen. 1. A vast majority of the African countries are corrupt, so any USD you get is sent to white controlled countries for safe keeping, your own leaders don't trust their own civilians. 2. You have nothing to sell that the US or Europe can't get somewhere else, and that somewhere else usually has a robust infrastructure that works most of the time. For example, there is a video here about a Ghanese cocoa maker who is lamenting the fact that they don't make chocolate in Accra. Well you have no milk, you have spotty electricity, rare to find skilled technologists as they have left for the better managed white run countries, and we won't begin to get into things like quality control and cleanliness in these plants, so there is no way in hell these plants would get certified by potential export markets. 3. As long as Africans think like a tribal people and not as a nation, they will be taken advantage of as the West, (and the Chinese for that matter), are very good at playing minorities against each other. Most Africans trust the West more than their own leaders.
The value of this railway to the economy of Kenya is super! How can you count that through maths? Its benefits Kenya in ways we cannot calculate. It is huge!
@@pogo1140 Just think about people using this train are saving how much time and energy that can be used for their job and other creating things. It is just like post service, you can't make lots of money by running post offices, but without these how the society will work. Also infrastructure like this railway will attract investment from other countries to Kenya. Is a question of chicken and egg which one comes first.
Only the West sees the BRI as a nuisance. However, the recipient countries sees the benefits of the projects being implemented. Many want them expended. These projects are not profit motivated Indonesia's HSR (just started operation), has brought much happiness to its citizens, as it halves travelling time, making for a better quality of life amingst the other BRI projects
An Infrastructure project is like educating a child. This means to empower him to be more productive in future, and then have a better society. Not to expect him to pay back quickly but for a better future.
Many pro-PRC people obviously make excuse that Kenya needs railway. Yes but it's too short.. too expensive.. no transfer of technology.. heavy use of Chinese migrant workers instead of locals. Why don't negotiate Korea and Japan so they all compete, for better price? Japan too basically has started many innovations in railway system.
Keniya should start with just two lines , then increase them gradually. Sudden investment in infrastructure is always spectacular , but mostly loss making work.
30- 50 year plan, minimum should be standard. The project is a 100 year + project same as the 'Lunatic' express built by UK in 1800s and still in use. We are judging it as if it's a 3 year repayment project. We will. Repay in due time
Would rather see this than nations loaded down with Congressional Military Industrial Complex weapons systems. At end of day at least trains actually spur some development. In addition by building when they did avoided the inevitable inflation and monetary failure's of today
Americans are smart, they know that only military spending is real GDP. Infrastructure is fake GDP since it causes debt, and no who cares if the people benefit its all about the making profits.
Apart from a road running parallel to the SGR there is also the old metre-gauge railway line that could have been revamped for a fraction of the cost...
Well that wouldn't be flashy enough for those grubby politicians, would it? I mean how much kick-back could you get on a perfectly viable revamped railroad as opposed to a new, sexy one?
@@alexandermutune6131 The British have been upgrading that rail over the years. The Kenyans less so. Our railways in Canada are over 100 years old and work fine - because we know how to maintain them. The Kenyans are not running that railway, so maybe the maintenance will be under the Chinese management, but the Kenyans will be paying for it anyway. If they had maintained the old rail, maybe even changed the gauge, it would have been a lot cheaper than building this one. At least the old railway is already in Uganda, which is a lot more than I can say for the new one to nowhere.
@@JB-yb4wn what is the lifespan of a railway line? It's obvious it Can't last forever & will require almost complete overhaul after sometime.What Kenyans & other African countries need is good infrastructure, mainly roads & railway to enable interconnectivity, trade & hence prosperity.If SGR is good for other countries elsewhere, then it's welcome in Kenya too.It only needs to be expanded to reach all neighbouring countries of East African community nations that use Mombasa port.
@@alexandermutune6131 No, what Kenya needs is less corruption so that these railways can be maintained without people lining their pockets, that is how first world countries work. That is why our railways last a long time because they are constantly maintained.
actually most railroad projects lose money, even France and Spain are losing a lot of money on their high speed railroad. But the benefit of the railroad project will last long time for future generations.
@@ashutoshtare9079 the SGR has not been completed yet to reach its full potential, ,but has already made a revenue of $600 million, at one point you'll have to admit that developing countries won't stuck at that developing phase forever
We Kenyans really need to listen to our former colonialists. They left us such wonderful legacies like the wisdom in checking with them before we talk to nations which might want to take advantage of us or heavens forbid...colonise us!
It isn't a failure project, because it has even been open that long. Most businesses give at least a 10 to 20 year timeline, before a project is deemed successful. Besides, if they already managed to pay some of the loan back, that is a success of itself! Give it time!
Most lenders would have a longer loan tenor for this kind of project. Tell the Chinese to provide appropriate terms. The project might actually be viable. BTW, cargo makes money, passenger trains are typically subsidized. Cargo moves cheaper by train than by truck by a facto of three to four times. If it is not, there is incompetent management, political interference and other issues that will prevent Africa from being competitive in trade worldwide.
The reason why SGR has not payed for itself is because of the USD interest rates hikes in every single month since the loan is in USD making loan repayment almost impossible
@@bdinfo6951 My post: > Go right ahead. A substantial part of the reason for higher interest rates and a higher priced dollar is that people and institutions around the world are buying dollars like crazy because their own currencies are declining in value. This kind of thing makes it difficult for people in the United States, you know. A good place to start would be persuading people and institutions in your own country to hold your own currency, rather than the dollar. Take Sri Lanka, Turkey or any number of other countries. They need to buy oil and they need to buy food, and they have spent all their dollars. They are broke. But your position, if I understand it, is not to look to the IMF for more loans in dollars. They should offer their own currencies to buy fuel, food and other needed products, and to sell their own products only for their local currency. Perhaps Russia will sell them oil for rubles -but they don't have rubles either.
The thing to move from trucks to railways isn't so simple actually. ->For such transport, more facilities for proper loading and delivering should be arranged. It also costs some bucks in the beginning for the government. ->Then,according to some reports,It shows cargo transported by railways are often mishandled and not safer. ->Even then,for transporting cargo from station to warehouse,we should use a truck again. I hope the government will soon take up an action plan to make it profitable and not fall into Chinese debt trap. Kudos Kenya 🇰🇪
@@MrChenjinyuan I am not completely sure about this,but as per my knowledge, the IMF loans are more useful bcoz the cost 1-3% interest for 25 yr period whereas Chinese loans cost 6-7% interest for 10 yr period. So, if Chinese loans are taken,it should be kept in mind that the profits should incur in as shortest period as possible.
Let me add a video which shows such problems faced by transports and my country introduced a masterplan to solve it. Take a look at this detailed case study. ruclips.net/video/M9bhCVqGaOI/видео.html
Do you think China will continue to develop transportation infrastructure around the globe?
Oh yeah, definitely. Until the US, EU, Japan, Australia, and other European democracies steps in to help countries in need of infrastructure - China will continue to occupy the vacuum.
The award of the contract was corrupt. The team of experts that did the feasibility studies were overruled by politicians. The project was known not to be feasible from the onset. The price was also inflated. Moreover, the technical team was blindsided by the award of the project to the chinese. The feasible option had been to refurbish the existing railway, at a fraction of the cost.
Yes
China building roads, rails, ports, and power plants are far better than the US transporting drugs and arms, laundering dirty money in the same developing countries, and also stealing their oil.
In addition, weren't the US accusing China of having some ulterior motive for doing all these good things that the US has never done?
Like expansion of Chinese military base?
Now that turns out to be a lie, and then what, Chinese project did not make any economic sense?
You mainstream media should be ashamed of yourselves, nothing but lies and lies and more lies.
Why don't you ask Kenyans whether they rather have a railway or no railway?
I am an American living in Kenya. Benefits of the SGR go way beyond moving materials back and forth from Mombasa and Nairobi. A lot of people are using it now to commute between Nairobi and Mombasa since it is significantly faster than matatus. Once extended to Kisumu, it will open up potential for mining and farming in the interior hinterlands. Right now, huge amount of food comes from Tanzania mainly due to better infrastructure connecting it. Fish farming in Lake Victoria could become a thing with the right infrastructure to quickly transport from Kisumu to Mombasa and allowing to sell on the global market.
The SGR may not appear profitable from a direct revenue point of view, but it is accelerating all aspects of the economy. This will increase national tax income. It is not just about cargo fees.
Exactly.1. Basic infrastructure may not payback by ticket selling as it's pricing has to be beneficial to more coverage of ppl; 2. Brings more management skills and educational insights to ppl who have chance to use advanced tech.
yeah tell that to the Chinese banks !
Your english betrays you as 'Kenyan' English not 'American living in Kenya' english, you imposter
Lol...
I’ll check back in ten years to see if ya right 🤔
I used to spend at least 8hrs on the bus at night going to Mombasa and it was always risky traveling on a two way highway full of trucks. Last year when my family and I visited home we used the SGR. Only $40 for first class, very good customer service with a lot of comfort and the travel time is half of what you would spend in the bus. Hopefully the project expands to other parts of the country. It has made life much easier.
It has made life easier but your country will soon fall because of this
the important question is cost of project . similar projects in india are completed under 2 billion usd . chinese companies obviously made huge profits .
Kenya has put their foot in Chinese bucket.🤔
@@TheJohn222222 I think over time the project will pray for itself. But was the cost inflated? Most likely yes. The deal was very shady I'm sure someone pocketed money out of it
@@stopiwantoff7965 yes and not only Kenya but very many African countries.
As a Kenyan,the SGR has really helped saved time and money while traveling to Mombasa. Buses were always unsafe especially when they broke down. The problem with the railway project is that there is alot of corruption. Our Government want to have a big slice of the cake that is causing issues with the Chinese. I don't blame the Chinese....our government is just too greedy.
Hi China bot.
@@musqul8566 That ain't a bot.
china rs2 ywan social credited
Yeah, it may be true, but I personally feel the return of investment is bleak.
Kenya will have to pay for that just like China owns Sri Lanka and Pakistan ports, be careful.
Its high time the African countries should stand on their own feet and let go of the tribalistic mentality.
@@musqul8566 jump on a highway yankee
As a kenyan ,all my friends are happy about this railway and we enjoy it. Nothing else matters.
You have to pay for it.. Or maybe ur children will
To be fair the SGR has positively impacted the movement of passengers along the entire corridor from Msa to Nairobi and vice versa. It is a great alternative to the road.
I don't use road anymore to travel to the Coast, there are just way too many stupid people behind the wheels of road vehicles. I can't gamble my life on long distance road travel, especially in our part of the world. Carnages every single day costing lots of human lives.
@@GanymedeAxis passenger traffic never makes money for railways anywhere in the world.Freight of cargo is the real $$$ maker.
@@pietrojenkins6901 and maybe with more time to grow industries locally it will be put to work ferrying exports to MSA as it does imports into the hinter land. But to travel on Kenyan roads is to understand the cost on lives that has been brought about the lack of law enforcement on these roads.
@@pietrojenkins6901 high speed trains in Europe make money. Commuter services don't, but that's by design. Still, freight transport must be moved back to the rails.
WSJ journalism Job are report or spread fake new..
my god, western media are still on this railway BS. us Kenyans love the railway, it has made life so much easier and cheaper. nobody expected the railway to be profitable at once, or even ever. theres other economic value it has unlocked
You are right , The economic momentum that a railway can drive far exceeds the railway itself .
I think they are mot assesing how useful it is, they are just saying its not profitable and how does the country face that debt+losses
America was build on rails.
It seems like they have forgotten that.
Funny this is exactly what ari Lanka said as well 🤔
@@trolllovindaddy really? Sri Lanka debt to china is around 10% of total debt Sri Lanka. 80/90% of their debt comes from western company and IMF and you guys still have audacity to blame china
Building large infrastructure is always a big risk for any Nation. However, building no infrastructure is a big failure. We shot our shot and we are growing with it here in Kenya.
It will improve Kenya's export sector. I just bought some Kenyan avocados from a supermarket here in Malaysia. Much cheaper than those imported from Australia.
Yeah. Another big problem could be killing off a big project prematurely. The SGR phase 1 is just phase 1 after all, its a shell of what its likely to be if more phases are greenlit and opened, or the whole system as planned. Phase 1 largely just connects 2 locations, but with extensions new possible trips for cargo and passengers can become viable, helping grow the economic development in many parts of the country, which in turn improves the SGR's business case. It's like induced demand.
@@drdewott9154 thankfully it seems like the current government is still committed to finishing the project. This is one of those projects whose true benefits will be realized when it is complete. That link across Kenya's major cities as well as import and export portals is critical. Once the link is complete this will be a breakthrough for the entire region. I'm also happy to see that Tanzania has made a lot of progress on their side. When the two tracks are linked we will have a circuit that will feed generations of east Africans for centuries. Despite the short term challenges, we need to think of our future and that of our descendants.
@@elimlinrr6898how do our kenyan avocados taste?😂
Yeah, overbuilding infrastructure as in this case is a temporary problem, especially for a fast growing place like Africa.
In my country railways had always been operating at lose but are maintained by the government as part of public service due to the indirect economic value it provides as infrastructure.
Exactly I can't believe what this is about... Every single govt infrastructure project is built on loans our taxes are just collateral for govt to get the loans...
How much does HS2 cost? In what world can they ever be repaid by train fares. That wasn't paid for using cash UK took out loans to pay for it.
When Italy gets billion from the ECB to build a trainline... No one is imagining train fares will pay for it but that the economic growth resulting from linking cities or shortening travel time alongside the improvement in quality of life for citizens over the lifespan of the train is worth it. Who on earth expects a train line to make $200m in a year.
As for Kenya not being able to service annual repayments 😂 China is an export nation all you need to do is offer them greater access to market which offsets the repayment. Will your trade deficit increase with China yes but I can't name a single country on earth that has a positive trade balance with China..
If they operate at a loss then they don't actually provide economic value. They are a government subsidy.
@@cleanwillie1307 Exactly. If the value they provide is so great, then people would be willing to pay higher fees (for both cargo and passengers).
@@cleanwillie1307 Indirect economic value, the train itself may not generate enough revenue to make bank but it allows other sectors in the economy to bloom. You can't export and import efficiently without a rail system, but with one the increased trade volume will generate more taxes, workers getting to their work places results in income and spending, tourism, logistics, and even the military all rely on transportation. Most transportation losses are being subsidized by governments around the world due to how much benefits they can bring.
@@cleanwillie1307 So since Road don't pay for themselves, they don't provide economic value? Good luck running a place without roads.
The creation of this property eventually allowed for exchange.
Welcome to the U.S. where our motto is; "come back when you are a little more richer."
This is the most intelligent word's I've heard.
Most times it amazes me greatly the way I move from an average lifestyle to earning over 63k per month, utter shock is the word. have understood a lot in the past few years to doubt that opportunities abound in the financial markets, The only thing is to know where to focus.
@@thomasnorris7285 Wow buddy, that's more than a mouthful of profits you're making. How do you achieve this feat consistently? You must be a genius in trading.
@@ebonicalbert5711 Anyways not actually, what I know about trading almost borders on zilch lol. I make huge profits on my investment since I started trading with Mrs Debbie Ramirez, her trading strategies are top notch coupled with the little commission she charges on her trade.
Building transportation is the first step of development.
My only question is why are the white guys so "keenly" interested 🤭 after looting the continents for centuries sold its people, I think they are definitely "genuinely concerned" out African people right?
No it isnt. No expensive transport no one can afford to use.
First step of development is development of its human resource, look at Rwanda
Do you see transportation in no man’s land? Demand vs Supply
@@somethingelse9535 the trains in Kenya are affordable.
This video doesn’t cover all sides of the story. The SGR project is meant to have long-term benefit, even if it doesn’t pay for itself in the short-term it still has major long-term economic benefits, especially as new markets and complimentary infrastructure is developed over time. This video also fails to mention the benefits provided to the people of Kenya by the passenger rail service of the SGR.
Maybe instead of trying to push a narrative of China Belt and Road world domination you should actually look at what these projects are accomplishing and how the people benefitting from these projects feel about them. Western countries could be doing much more to help Africa develop it’s infrastructure but instead they are trying to villainize China for providing the economic support they fail to give.
Build giant infrastructure, the economy does not immediately jump up 5000% within 12 months to take up 100% of the built capacity. Why do we pretend to be surprised by this. This is stupid.
Demand will grow. Because economies don't grow instantly. It will ramp up.
Any wealth that pops up will be sucked from the surrounding local communities. You should listen to America, we are smarter then china
The problem with these economic assistance however are the contracts China offers. What benefit do these projects give if the countries default on the loans and China regains control of the infrastructure? Many countries inevitably end up paying huge loans for nothing.
@@coolhippies1533 it still far more better than default on IMF debt, if your default on IMF debt your country are force to cut spending and privatize many of state industry. And even IMF could potentially influenced the country politic. And most of those IMF loan are end up on the corrupt politician, and leaving nothing to ordinary citizens
Chinese loan on the other hand still give you an infrastructure that ordinary citizen could use and benefit from it
I believe every Kenya is proud of having this SGR. It is their railway. They now has a rail industry employing thousands of people. There have been a lot of videos on young Kenya girls trained to be SGR drivers or engineers and technicians. China is the main lender who may lose money but Kenya always wins. The funny thing is I think China doesn't mind at all because it has donated hospitals, schools, university, sport stadiums, parks, Africa Union HQ building and CDC to the African nations. China is there to share future together.
You can say whatever you want but the SGR is the best thing that ever happened to us Kenyan commuters
Hahahaha as long as you dont have to pay for it
@@fiachramaccana280 There is no free lunch.
Lol.. Kenya really benefited from this Chinese loan. Now they have a regular seat at the IMF table and their public is partying on the streets. All thanks to China
@kateciku: So who , do you think, is paying the cost of construction !
@@fiachramaccana280 you can say the same about everything though
It's not even 2 years since it was launched and our negationist friend living far away from Kenya knows more than us that the railway isn't not profitable.
It's not always about financial aspect but the chance to connect A,B to C and Unify the country, even in China some routes aren't profitable but they are essential
They cannot decouple the usefulness of SGR to the citizens of Kenya outside the prism of capitalism. The imperialists are always dogged by this one trait because as long as they are not monetarily benefiting from it or see how they can milk it, then it is a useless endeavor.
So many Chinese supporters on here.
@@JosephMwema they think it isn't good as long as its not done by them
@@JosephMwema We know White lies when we see them.
So the benefit of the railway isn’t profit, but rather political? Good to know. I hope Kenya’s friendship was worth the price that China paid.
Irrespective of the view that China is putting countries into debt I think infrastructure development changes the economic prospects of locals much faster. The US has been exporting military hardware rather than focusing on infrastructure development across the globe. It just doesn’t work long term.
And that military hardware are the source of war
Use your brain. USA 🇺🇸 guarantee African countries a market for their manufactured goods. China has not. Smh 🤦♂️
Agreed. Western Analysts should be wary to do genuine comparison of what the Chinese are offering versus what Western Capital has offered and achieved in Africa. "Placing countries in debt" is not a worsening of terms, that's merely the Chinese doing instead of a Western entity. The question is: "Whats the trade?" Infrastructure is a better trade than military hardware or possibily defoliating and corrupting nations for natural resources.
Conveniently ignoring all the relief, education, and smaller site projects America funds abroad, which aren't so flashy for local politicians and in fact tend to work against entrenching the incumbents by breaking down tolerance for corrupt governance.
@@doujinflip build schools to brain wash the populace is good , supply weapons to them , regime change . Rinse and repeat. No wonder Africa is the way it is … 🤦♂️
Maybe you guys from the "first world" think just you deserve a comfortable transportation. Saying $200M loss in 2020 is a bit dishonest when you forget to mention the pandemic. Imaging that there were no roads between those two cities could be ingenuous not to justify the investment. But no, it's just the eternal racism rich country people and WS journalism throw away. An investment of this magnitude takes years to pay itself and to work on. What a terrible article!
Exactly. The writer should be in shame
Exactly. These privileged few enjoy good transport (except the Americans who might get a HSR next century), and yet they just don't want to see poorer countries develop. It's in their mindset that poorer countries stay poor.
You're completely missing the point. WSJ is a FINANCE and INVESTMENT focused media organisation. The main focus of the article is not to say that the SGR is a failure objectively; it's to report that the project was expected to be profitable, and ultimately wasn't, and serves as a case study of to explain why the Chinese government is now scaling back its BRI plans. You see? You're just choosing to take offense from this factual report, which gives no opinion on development or transport quality, as that's not what the report is about.
@@AGP335 . Sorry, I have to call you out on this. WSJ is not just "a Finance and Investment focused media". Truth be told, it is has been at the heart of US domestic politics, as well as geo-politics in recent (circa since 2008) years. It uses pseudo economics metrics to be fanboys of QE 1 , 2, .... when Bernanke, Yellen, and Powell wanted to gather a "posse" to justify them. Now, the "mis-deeds" are coming home to roost, as we are at the cusp of an inflation beginning with only a reportedly 8.9%. Anyone who thinks that WSJ is not un-objective in their opinion pieces disguise as reporting, kindly note that I have a planet to sell at a price you can well afford. Interested?
Agree. I live in Kenya and I am seeing huge number of benefits from the SGR to the locals. This goes way beyond cargo revenue.
I am Kenyan and we love the SGR. It is now making money and phase three to Uganda is now starting. The project has greatly changed the country, for example, promoted other sectors like tourism.
The US has been claiming that the BRI is a debt trap and highlighted the woes of Sri Lanka as a typical example. But only 10% of Sri Lanka's debt is owed to China. The rest is owed to Japan and institutions in the west like IMF, World Bank
The debt-trap narrative is indeed false; however, China did undeniably contribute to the Sri Lankan crisis more than other international lenders. This was not out of malice as some suggest, and China should not be villanised for this, but it was rather out of lack of scrutiny - they approved massive loans for extremely short-sighted and sometimes straight up corrupt projects in Sri Lanka, such as those in the former President's home province, including a massive container port, international airport and stadium, which have all been pitifully underused since completion. It was evil of the Rajapaksa family to be so corrupt, and they are the ones to villanise for this. However it was also clearly irresponsible of China to lend out their own bank's money and bring a developing country under a higher debt burden for the sake of extremely silly projects.
@@AGP335 china contributed? Lol what world are you living in?
Japan is also 10%, world bank also about 10%. Almost half is market borrowing where the sate issues bonds etc to borrow. Chinese loans are offered at very high interest rates and impossible conditions, stop fooling people mister Steven🙄
@@vengeance5322 delusional
Shortsightedness -- this is exactly why the US has such shitty infrastructure while printing money to fund meaningless market speculation. A railway is supposed to be used for decades. It'd be a miracle if it starts to be profitable in just a couple of years, even in a developed country. In fact many infrastructure projects are never profitable by themselves, because they don't profit directly from much of the economic value they create: it's not like a railway station or an airport can collect taxes on the businesses pop up around them. And lastly, as a Chinese national, I find it hilarious that nobody seems to understand the exceedingly simple business model of B&R. It's not an investment program. It's selling infrastructure via financing, just like how houses and cars are sold around the world.
Shortsightedness is not the only thing. You forget about many other things.
Who will use it.
Who will pay for it.
Who will build it.
How much it will cost.
How safe it will be.
How it will benefit society.
What will the reaction by the public be after the first year of service.
Many many factors.
Also will the government allow for it.
Checks and balances are supposed to help the citizens of the United States, but the Senate in the federal government really causes the lack of progress for the United States because the United States has been so divided since the '90s.
When you rely on one group of the federal government to decide whether or not a project gets the green light or not, and that one group is divided in and of itself filled with people with their own self-interests that disagree or that don't understand that have the ability to cancel any given project or proposal, that's why the United States is so far behind.
The B&R... "It's not an investment program. It's selling infrastructure via financing, just like how houses and cars are sold around the world."
Though it's not an investment program, the Chinese government does expect big returns of benefits after the B&R is complete. One thing that they expect is more money for energy or ease of access for energy to be brought inside the country. Easier trade more trade with countries that are connected to China via Belt and road. And also legislative influence and power through relations with the belt and road. Countries that have shaken hands with Chinese officials that agree to allow China to help their country will be more likely to vote alongside what China believes. Which can have a huge impact in the future.
Really well said, the economics of infrastructure is different from other kinds of business investment. This video does not tackle the long-term benefits of the project. There was also no mention in this video of the passenger rail services provided by the SGR which have been very helpful to Kenyans
Good point. The infrastructure actually contributes to overall growth
And we still don't have train between San Francisco and Los Angeles. Fml.
I know right. 300 mile track in 3 years AND ahead of schedule. Never would have happened in the US
This is a normal train , not a high speed rail like in CA
@@johnsamuel1999 the last train track built in Kenya was by the British, over 100 yrs ago. That’s how big the deal was when China built this.
@@billyhe2724 kinda true
Amtrak between Oakland and LA is $51 one-way with 20 trains/day. It took me approx. 10 seconds to find this...
I used to work in this project, I was in charge of land acquisition, I am Mr. Shen. Hope my friends in Nairobi still remember me.
工作不容易，辛苦了
❤excellent work. Congratulations.
Would a Kenyan citizen ever be allowed to be in charge of land acquisition in China? I guess not.
is china really pursuing with the belt n road
@@TheGuggo Yes, when kenya become more develpped than China then chinese will be happy calling Kenyains to build things in china to help it.. like chinese are doing now in Kenya
Ths project was finished in 2017. So, when you say it hasn't paid for its self, was it supposed to recover the entire $3.8 bil cost in just 4-5 years of operation??
Projects like this 30 to 50 years is realistic time scale. (edit) but for modern peacounters and paperpushers everything more than 7 years is too long.
In defense of the SGR railway ... It's has really improved transit btwn the 2 cities and was a huge success ...it may not have been profitable but you can't compare such huge infrastructure that will be there even after the debt had been paid .it's not always about profits it all about long term economic growth. Plus the Imf and world bank never invest their money in infrastructure .
Atleast people can see what they are paying for with the SGR .
Yeah true 100 percent
And also most of IMF debt are not effective because many of the fund are corrupted by local politician, at least Chinese loan are creating an infrastructure that an ordinary people could use and benefits
This is not true. SGR did more harm to economic growth than benefits.
1. Opportunity cost. Could that money have been used elsewhere to produce greater economic benefits?
2. It ruined Mombasa's economy. Cargo trucks owners went bankrupt.
3. It made transport more expensive. Transit via cargo is almost half the cost of transporting via SGR.
4. General corruption. The contracts are still privates but we had information that over 1.5 million was used monthly on credit. Land compensation was also full of corruption cases.
The SGR in the long run will drag economic growth unless its profitable. We don't have endless resources to support such white elephants
if it consumes more than it’s produces it’s not an “economic growth”. This is an economic slowdown
@@redakteur3613 I don't know what made you think Kenya Is not capable of paying it's debt but the truth is that Kenya is well capable.
So if I understand correctly, WSJ did this video without interviewing any of the government from Kenya or China, and they got all the information from internet? Damn, is this how journalism being done nowadays?
Their idea is to bad mouth this project. Make it look like it was a failure and that the people of Kenya were going to pay dearly.
they don't care, westerners just like to say and hear bad things about china, that make them feel good because it easy their unsecrty toward china.. and the media in the west just answering the demand.. this is why you see high views on such videos
Before slamming the WSJ, why not tell us exactly what part of this video is incorrect?
Let me put it this way: despite attempts by Western media to criticize ambitious projects like China’s railway development in Kenya, Western governments have yet to offer a comparable alternative to Belt and Road Initiative projects. Joe Biden once proposed that democratic nations should launch an infrastructure plan to counterbalance China's Belt and Road, but that promise has yet to be fulfilled.
300 miles, started in 2014 and finished in 2017, Miracle. Impossible in the UK, US and Germany
No problem if you can just take the land and not have to fight lawsuits for confiscating private property.
@@WJV9 There are a number of private properties still in the highways/motorways in China as the government and the property owners failed to reach an agreement, though the government had raised the compensation. Do you have any examples that 'confiscating private property'?
Germany already has great roads and railways.
@@paulmitchell5349 The Berlin Brandenburg Airport took14 years after construction started and 29 years after official planning was begun.
Why is the West ALWAYS engaged in anti-China propaganda. Why? This video is a clear example. "Oh no...China invaded Africa. Only white people are allowed to do that."
I'm a Kenya living in New Zealand for 20 years now. I have to connect 2 trains to Auckland city and it takes almost an hour and a half while it takes less than 30 minutes if I drive. I traveled from Mombasa to Nairobi years back.The train used to leave at 8.00pm and will reach it's destination the next day at 8.30am. So now with SGS it takes only 8 hours that's progress. Stop this nonsense man!
Stop criticizing China. It has been doing better to the world specially in Africa than the entire western countries.
another pampered west kid knows a lot about Kenya and he's here to advice us on what we should have done.
They are brainwashed to comment on any and everything by their mainstream medias.
Railways around the globe are meant to carry people and economy, therefore even if not profitable they still generate profit for the country.
I suspect that this is being financed essentially off the back of factory workers in China. If you look around the world, there are a huge number of railroad lines that have been abandoned rather than carrying people and cargo. America has one of the finest freight railway systems in the world, but driving around here in Colorado, it is easier to find abandoned track than the lines that are still operational. It used to make sense to run track to modest sized factories but no more. That has been replaced by containers traveling from China.
Lol.. Kenya really benefited from this Chinese loan. Now they have a regular seat at the IMF table and their public is partying on the streets. All thanks to China
@@richdobbs6595 Colorado is not Kenya... Apples and Oranges..
@@stickynorth Railways are railways. Many formerly profitable lines are abandoned. This idea that railways are necessarily beneficial eventually seems to be questionable, given how many don't even get maintained. This idea that they are "beneficial" for social reasons is the same used to justify building sports arenas that get abandoned when the next project comes along.
True, public transportation systems are not supposed to be profitable.
Even Amtrak in USA doesn’t make any profit !!! Majority of lines in US are private with monopoly!
Meanwhile Ruto messed up tho
Railway was built and running well
before truckers killed rail transport!!
The car manufacturers and the oil corps never let usa have a mass transit. While Europe, China and India built huge networks of it.
America's passenger rail is not profitable.
But America's rail freight is some of the most profitable in the world.
you look from a business man point of view, that is it has to make money. The problem with this thinking is public infrastructure is not meant to make money but to serve people and to stimulate economy which in turn will result in economy growth and as a result government tax revenue will be bigger .
How about dam,highway, bridges. Should government make profit out of those? Those three above lose money but is needed to stimulate economy.
China has been doing this method sucessfuly since 40 years ago started with normal rail network. Public transport is subsidized by government to provide affordable transportation for people. Isnt that what government supposed to do? To serve people and not to make money out of them ( business man thinking)
China is not purely capitalistic. Using US logic than all fast railroad will never be built at all. It is no wonder why public transportation in US poor .Take a look at NYC subway and compare it to nanning (a 3rd tier city in china) subway. The contrast is like heaven and earth.
@@andia968 Thank you, that is on point
@@alanlight7740 "America's passenger rail is not profitable." passenger railway service is never profitable; it is not even supposed to be profitable; only in screwed Gringo minds
The development of a railway transport system will be advantageous once the mining industrialization throughout Africa comes online
There's no point if the railway doesn't reach thoses so called mines or transport hubs is it
What happens if it cost another 3.3 billion dollars to build that infrastructure
The railway is losing 200 million dollars per year now and still owes 3.3 billion dollars plus interest
This railway was nothing but a debt trap in the ccp favour from the start
Will China be involved in that process? If so, will the mining extract be exported, via Mombasa port to China? Me thinks yes!
Net sucks 😕
@@robinlecomte1242 due to the CCP greasing the Kenyan government officials
There is no difference between the CCP and the Marfia
@Thomas Jordan what's funny
Man it’s almost like rail is an inherently unprofitable venture and should be seen as a public service
Kenya should be proud to have new rail transportation. Profits will return in due time. No needs to worry much. 💪🏻
Mate it’s 3 billion dollars
Worry at least a little
@@luisf2793 those natural resources will more than pay for itself
Lol.. Kenya really benefited from this Chinese loan. Now they have a regular seat at the IMF table and their public is partying on the streets. All thanks to China
This has worked OVER and OVER in China and elsewhere. Here in AMERICA we were once excited by things like Transcontinental Railroad, the Golden Spike and all that. We found it worth doing as a bunch of private ventures, how much more as a state-owned enterprise?
@@luisf2793 I think you are forgetting how rich this place is… all those resources and human capital they have it will eventually pay for itself
I heard about the Chinese debt trap since 2013, but why are a lot of countries still dealing with China that makes me wonder if is it the truth about that.
@@wakawaka5131 and give us your source
@@wakawaka5131 A lot of bullshit yet not a single source to back it up with
@@wakawaka5131 source ???
@@wakawaka5131 The Government denied on defaulting the loan payment check @africanews
@@wakawaka5131 8-10% loan is a debt trap but those hold the other 90% is not a demb trap. your Logic is not working too well
Most railways aren't profitable.
Most infrastructures are not because it’s not pure market good. It is the responsibility of a government. You don’t always measure simple financial ROI on infrastructure investment.
@@billyhe2724 correct Mr. He
In case of Kenya, I think the US is sabotaging and badmouthing the Chinese effort.
Did you know that it was the US or its stooges who blew up the nordstream pipelines just couple of weeks ago?
The US will do anything to desperately keep itself at the top, but time is running out.
I think the point of the video is that the railway was built with the idea of being profitable to pay its loan, but it hasn't for several reasons and someone need to pay the debts. And it isn't only about Kenya but also about how China financed projects without enough consideration and its hurting its own bank's finances either though defaults, write-offs or refinancing in a moment when its economy is struggling with other issues.
Also, how BRI isn't going to repeat this kinds of plans on the future.
@@EduardoEscarez Kenya’s Chinese debt constitutes less than ten percent of the overall national debt, Kenya is a middle income country which can sacrifice and pay the total Chinese debt in a year if worse comes to worse. There’s no time that Kenya defaulted to pay its debt obligations. Kenyan government decision to go for the project was purely for the long term benefits and not short term. The west still angry for not being given the project
SGR Will expand to Uganda, Congo and Southern Sudan to conquer the region. This is the best thing that ever happened to Kenya. The current problem is due to Politics and change of government but the new government has no choice but to follow up with dept payment. Kenya was amoung the few Countries that benefitted enormesly from China belt and Road project since our economy was ready to expand. Not all countries had the same chance.
When was the last time USA built a 600km railway out of nothing? 1880? This railway in Kenya is just the first step to finally industrialize Africa by force, so that their stone age life will change. You can not feed and deliver goods to 1,5 billion africans with stone-age methods or undermaintaned colonial infrastructure. This is why it´s very important that China controls everything, so that Africans can´t destroy what was built for them.
long term the rail line will no doubt be beneficial, it is early to judge, for cargo volumes logistics might be a problem but eventually it will be resolved. Kenya is a very populous country, Nairobi and Mombasa are very big cities, there is great distance and people inbetween them, it just cannot go wrong if it is well managed
You really hit the nail with that comment. Management and cronyism is the biggest impediment to African development.
famous last words for another crynese debt trap
IF IT IS WELL MANAGED underline that 100 times
The Western media is stupidly obsessed with blowing out of proportions a few challenges here and there. These projects are very viable. Watch this space.
When you put your money,
You can wait., Bite nails, sleepover.
When you take credit,
It must be returned in time.
This story would be more interesting if it mentioned how much cargo needs to be transported to the coast from Nairobi, and whether any company could have built a railroad of the same quality for less.
They did. There’s literally a graph that shows that they are currently transporting about 1/10th of the cargo they need to be hauling.
And “quality” is not exactly something that Chinese construction is known for. You can see the leaning skyscrapers and falling viaducts and buildings that Chinese construction companies have built both inside China and internationally. It would be trivial to match that level of “quality”.
@@TohaBgood2 That's not quite what he was getting at. He was asking how much cargo, by every means, goes along that route. If you need to send 90% of it by rail for the rail line to be profitable, it probably isn't going to work out. But if it's only 10%, that's achievable.
That being said, I'd be willing to bet that China was never overly concerned with whether or not the line makes money.
@@dgthe3 - Exactly! I also agree that China isn’t interested in whether the line makes money. The Belt and Road Initiative seems mostly about political and economic influence, not profit. Also, it seems counterproductive for China to make low quality infrastructure because the point is for developing countries to look to China for their infrastructure development.
@@TohaBgood2 You are just imagining from your poor stereotypes. You are just using that several cases repetitively and that’s everything you could imagine of. Which country does NOT have engineering disasters or corruption issues? I’m not saying China is better in containing corruption but reminding you that the amount of infrastructure built in China every year is higher than the rest of the world.
@@Propapanda0213 I'm "imagining" from a leaning Chinese tower in my home town that is now costing nearly triple to fix! Otherwise that tower will fall on other towers and on a multi-billion dollar train station!
And the question is not if engineering mistakes happen. They happen everywhere. The question is about the utter disregard for safety and sound engineering practices that Chinese firms practice. Those firms are bred in a non-competitive internal Chinese market where everything is decided by nepotism. And we see how that makes those firms incredibly corrupt and incompetent. They're just not capable of sound engineering in a competitive and safety-minded market because they have literally never had to do it in their own country.
First of all, the railways are not something for profit. But it'll create more job opportunities in other ways such as repairing yards, cargo and port related jobs, supply chains, reduce the use of fuel ⛽ for truck transportation, etc.
A year on, it's a resounding success and helping increase Kenyans lives
Railways opened up economy's all over world,people can travel quicker, long-term binifits for country, quicker safe transport.
Amazing engineering connecting two city's, eventually will be paid for.
The British built the first railway from Mombasa to Uganda for free. After independence, all they had to do was to maintain and upgrade the rails like the ones in European countries!
There is nothing they did for free.What about all the resources that were extracted from the interior & transported using the line to service the thriving British industries at the time?
@@alexandermutune6131 were we educated enough to know what to do with those said resources? Lol
Imagine!!! And we just FAILED. This was also supposed to be an electric train but cause corruption is the national language, we got a slower train. 🥴
@@mfululizowak9899 The resources can stay until the owners are well educated to utilize them.
@@alexandermutune6131 lol...the same owners who would sell their own people for tortoise shells, liquor and sweets?
How do you know our ancestors, who didn't know the value of ish, didn't sell those resources for dumb stuff again?
Insightful. I hope all turns out well for these projects. It’d be nice to see East Africa prosper even more.
Belt and road is a scam to extract resources. Why is it that kenya and every other country is contractually obligated that chinese companies build the projects using Chinese workers. No African employees. So no benefit to local economies. These projects are rarely ever used just like homes and apartments in China itself. $200M loss per year is just the start. Just wait until it has to be repaired by Kenyans who didn't build it and who don't work on it. It becomes a 3 billion dollar piece of trash then.
Are you guys blind? The project is making 200m$ loss per year.
Project is made with Chinese items, Chinese loans and Chinese workers. And Kenyans paying interests to china as well as paying up losses.
No idea why Africans getting trapped to china even after they saw situation in srilanka, pakistan...
A no-bid contract? Those go over well 🙃
@@richardarriaga6271 even if it was a no bid contract, the railway is already built though and is already functional. Even if there was bidding, that won't suddenly increase the amount of freight that will use the railway service.
@@richardarriaga6271 Was the price inflated? How much would others charge to build similar railway? How much from Americans or Europeans or Japanese, Koreans? Maybe the Chinese were too low for others to make money.
The question is how the railway impacted the GDP of Kenya, not whether the train is profitable. Railways add $17 billion USD to the GDP of the Canadian economy despite the CN railway operating at a loss sometimes.
The SGR is a good idea only that the section done is too short and captures a very small catchment area or zone. Had this line gone all the way to DRC and in particular Goma DRC and Kisangani DRC not forgetting it's northern route to Juba south Sudan, then it would be a viable opportunity to open all sectors including tourism. The opportunity is still there but there was underinvestment in terms of extent of the catchment area.
By the way, who hasn't noticed that local tourism is at it's highest and nearly all year round at the coast of Kenya ie diani, watamu, Mombasa etc. This is courtesy of the SGR Kenya.
Each East African country is responsible for the building of their own SGR sections! Some countries are a bit reluctant to this!
Very true! This coupled with free movement of people and goods around East Africa.
Fine Mercury you are 100% correct. If it connected to Uganda and South Sudan, it would have been viable
This guy gets it. Infrastructure has multiplicative effect. Building transportation from A to B may be a little useful. Once you've also built transportation from B to C, then the A to B section becomes very useful. If you Then build a section from C to D or from B to E, then A to B becomes extremely useful. However, you need to start somewhere. Africa needs to go through this painful process where each section built will only seem a bit useful, but once everything is connected, Africa's potential will explode.
China has unlocked the world's biggest e-commerce market as well as huge domestic tourism, plus a huge number of business men are traveling all over the country searching for and creating opportunities. This is all thanks to investing in all sorts of infrastructure from transportation to internet connectivity, and one day Africa will reach this point too.
But 80 percent of cargo from Mombasa port is for Nairobi and it's environment. Why spend billions of dollars loans for 20 percent of cargo to other parts of Kenya and beyond?
Just like roads, water, electricity and public hospitals, the SGR should be treated as a utility not at how much money it makes.
SGR is a public utility and service to people. I have just returned back from Kenya. I spent 9 hours and USD13 on the road from Nairobi to Mombasa, it's a super risk highway with trailers. Anything can happen on that road.
My return journey on the SGR was 4 hours shorter safe and costs 5 dollars less than travelling by road.
Reaching Kisumu and Kampala, will quicken movement of people between those countries
It often takes a long time for projects like this to pay off. And from what some of the other commenters have shared, it appears to have yielded serendipitous benefits that may improve local life and the economy overall. Lacking knowledge of the history of great projects, I couldn't say how long it took for the Hoover and Aswan Dams or the Brooklyn or Golden Gate Bridges to 'pay off'.
Land values go up.
All I can say is the line from Vientiane to luang prebang laos has been a huge success. People there use it everyday. I've used it several times. Always on time and very clean.
Better than IMF loans which keep poor countries poor.
Also western loans require regime change or coup's so as to be given👎👎
@@daveygiturwa8598 👏👏 on point👌
Do your research on IMF and save us your ignorance. IMF doesn't fund grand projects..they help countries manage balance of payment difficulties and chip in when international financial crises happen
@@georgepresley5120 please do your research too.. Most countries can’t get out of the debt trap from IMF
Neither are good but. At least China gives people a bridge or railway. The public can use!
@@AR21 IMF can't give you a bridge or a road but it's the institution you will run to when you fail to pay for that bridge or road. The Chinese give you expensive loans with conditions that only benefits them. The SGR was funded by the Chinese,built by the Chinese and with Chinese materials. Even the staff running the SGR is Chinese
The sinophobia in this comment section is appalling. China is doing what the USA and the IMF have been doing for decades. Since when are you all staunch anti capitalists?
Entire premise of the video is that infrastructure should pay for itself, which is very often far from the truth.
Yep every public road is free to user in every country but the local government has to maintain it for ever.
On a national level it should pay for itself, in terms of direct and indirect benefits. My understanding is that is also in question. It's all just running way too far ahead of places like Kenya being worth connecting on this scale.
Your comment is largely true. The question is whether the cost, including the losses, is worth it. If it still costs more to move cargo from Mombasa to Nairobi than from Shanghai or Miami to Mombasa, when cargo transported by truck is cheap (much cheaper than by truck), then there is no advantage and Africa will remain uncompetitive in trade, which is the tried and tested path to economic strength. Simple arithmetic can be applied to see if the price was too high, the loan term too short, the truck lobby too strong, and the passengers too few to cover maintenance and operating costs.
Kenya should have built this basic infrastructure themselves.
@@stevensmith2078 That is the difference between the western and Chinese attitude towards roads and rails. Hundreds of trucks and the fuel cost plus the deterioration of the road and the vehicle can never be cheaper than by rail. If it is the other way then it is to do with pricing of the services.
The most important benefit of the new infrastructure is the economic development it brings. The land value surrounding every station is guaranteed to rise possibly 10 times. New towns and cities could be developed. The new tax revenues from the passengers and the freight earned by the government are real benefit but are not on the SGR's book. The gain in economy associated with the SGR is impossible to calculated. The SGR spawns a new rail industry that provides hundreds and thousands new jobs in management, operating, signalling, maintenance, training centres and repair shops. The technology transfer itself is also substantial because Kenya now has to master the complete system. When China tried to buy the Germany's HSR system the cost of technology transfer was same as the HSR itself.
A BRI project is win win arrangement. If China loses out that means the host country wins more. The overall result still fulfils the spirit of the BRI.
China is doing a lot of things for free in Africa. It built schools, water supply systems, hospitals, sport stadiums, a CDC centre and the African Union Head Quarter as gifts. Most free donation of Chinese vaccines end up in Africa. Since 1963 China has been sending medical teams to provide free medical services initially to Algeria and later to many African countries. Today there are 45 to 50 medical teams still operating. It might have nothing to do with it but the African continent with 54 countries put together still has less infected cases and covid deaths than the US. It has been like that since the covid started!
Kenya is building the SGR itself. China is assisting in whichever department Kenya needs help. You may have not seen the youtubes videos of Kenyans being trained in their SCR trains manufactured in Chinese factory or the drivers trained in China's HSR system.
In a nutshell a lot of China's own HSR lines do not make profit and a few wouldn't even be able to pay for the electricity consumed but China is still building them to suit its development plan which could be 10 to 15 years ahead.
You can dispute it but the Chinese experience is to be come better off the first step is to have the infrastructure available.
@@gunsumwong3948 The SGR is a great idea. Infrastructure needs to be built (and maintained) first. I promote that and that is not the problem.
The problem is that the basic infrastructure, which is not complicated, should be built by Africans. The complicated technology of the trains is built in China, which is fine in the short term. Are Kenyans, Africans engineering the trains in China and getting technology transferred? This is what Africans should require and what China did. Do you disagree?
Learning to drive a train is not transfer of knowledge and is less than flying an airplane (as if pilots flying Boeing and Airbus planes is knowledge transfer. Delete that nonsense from your post).
The issue is one of cost of the line, it not going to where the demand is, the loan repayment period being too short, etc. Please keep the propaganda. My comments are not anti-Chinese, or pro-West. They are pro-Africa and I will continue to point out issues where they exist.
US companies and government officials are forbidden to pay bribes. China has made big strides in stopping corruption internally but overseas it is just a tool in the kit. Maybe China is more realistic, but when I was working for American companies around the world, I was proud to hear people say, something like, 'these are Americans, they can't pay bribes.'
CalTran in California USA requires 80 % of the revenue to come from State & Federal funds. Although a ticket from San Jose to San Francisco cost $20, the real cost of the ticket is $100 (the same as an Uber drive). Can you analyze other US railroad projects and actual revenue models? Africa seem the same as the US.
USA didn’t borrow money from China to build it. California is the richest state. Use your head, see the difference
US railways were funded substantially by land grants.
It's so funny how the west review African matters😂. Dude, ask Kenyans whether they like sgr or not, simple poll. 80% like will be an underestimate
😂The wsj doesn't even pretend to care about sub-Saharan Africa. It only cares about China.
I like my BMW too, which cost three times as much as it should. I still should not have overpaid and should have bought a Toyota instead.
Sure they like it. Everyone does. The only question would be whether they can pay for it.
jealous westerners cant even make an hsr, california hsr wasted 100b and still nothing to show
@@stevensmith2078 you should have offered a better deal
Would be great to understand a bit more on the financials. If the SGR made a 200M loss, then how is it that the debt decreased to 3.3B? Is it possible that SGR paid back 300M and therefore made a 200M loss?
Oh man! I didn’t expect such comment. It’s operational loss. In addition to their loan.
Loan repayments are treated as balance sheet items not income statement items. The interest on loans issued is recorded as an expense however. But, in government accounting, they may sometimes take cash payments for loans as part of annual expenditure itself. That’s why they often record “surpluses” and “deficits” as opposed to “profits” and “losses”. Would be worth digging further into the public documents. It may be a USD 200 million “deficit” and not a “loss”. That said, continuous “deficits” are not a good thing either; the money has to come from somewhere!
I am Chinese, not a bot. I hope this SGR could be profitable early for Kenya. As an infrastructure, it offers a choice for people living on the land, and it will change the movement of people, and goods, the same as things happened in China.
Some focus on the future, and some focus on the present.
Some focus on the NATION, and some focus on their STOCK PORTFOLIO.
The irony of 'Wall Street Journal' talking about how being in debt is a bad thing, but if you take one look at wall street...
It's only ok when they issue vulture funds to other countries or take money from Americans through predatory laons
Precisely
@@petergreen5337 Debt isn't a bad thing if you have revenue or a business plan to pay it back. Debt is bad when you have no bid contracts on a project that has no business case at all to ever be viable. It is astounding you can't figure out the difference...
Will London's Crossrail and HS2 be profitable and pay their construction costs?
hs2 has not even started mining iron ore.😂
The Jubilee Line Extension generated an aggregate land value uplift of 3.5 times the construction costs. London Overground and Crossrail have given rise to property booms along the routes. As far as I know they have not been measured. These projects are a massive giveaway to property owners.
Same on the South Coast. Train services were restricted due to the bottleneck at Croydon. After it was rebuilt in the 1980s the trains became more frequent and reliable and more people started commuting. House prices in Brighton then shot up.
The cost of building the SGR in Kenya was inflated by double the cost. This is what happens when even the president is purely corrupt.
I'm surprised none of the Kenyans defending the rail wants to mention that, or even the government's failure to make public the SGR contract.
Total BS .
The problem is the corruption in the Kenyan government! The moment you remove competition for the tender, that means you just threw money away. Not being able to connect the railways to Uganda and Rwanda, will definitely result in not having enough containers to ship, hence the loss.
18 months ahead of schedule! Bravo!
What bravo Kenya is in China debt trap this What china want
@@funfab9146 No offense intended. Here in America, we see so many projects go over-budget, beyond schedule and/or unfinished, it was encouraging to hear about a project going better than expected. As to debt, we have more than our share of experience with that as well.
Kenyans love SGR and use it daily for cargo and passenger services. So far they're making profits which keeps increasing yearly. The only problem is that the train can't go upto Naivasha inland depot since it was shut down by the new president with claims that's it was a waste of money to move cargo away from the port to farther inland but it made it easier for Uganda to get their cargo faster from Kenya
not true
@@munenejoe6682 ofc I can't speak for every single Kenyan but it's clear the majority have no problem with SGR
If you look it up, you will find that it is not profitable. The executive order requiring use of the railway was meant to help make it profitable.
@@munenejoe6682 the sgr has never paused even for a day, so stop lying dummy
How can they be making a profit if the railway is losing 200 million dollars a year ?
Plus still have to pay back 3.3 billion dollars plus interest ?
So how is that in any way making a profit ?
The road to industrialization is painful. Initial outlays are expensive and take time to reap off from. Ruto's hasty decision to revert port operations fully to MSA is an indication that his vision is not about industrialization and increasing cooperation between regional countries but is really about winning the support of MSA voters. Shortsighted and Sad!
I wish infrastructure projects could be viewed though another lens besides profitability. It’s clearly brought huge benefits to Kenyans
You always talk of big bad china yet France in Africa is the worst thing to ever happen to Africa
thank God they have zero influence in kenya although they are one of biggest lenders to kenya
@@bloggtalk5085 and yet they say china is debt trapping kenya lol
@@Fauzanarief-n7i propaganda.$3.8b debt on a $110b economy is not drowning
@@bloggtalk5085 especially those debt are in form of infrastructure project, I would say that indirect benefit are outweight the cost of the project. Even the raise of land value alone could potentially cover the entire project
France?! What the west African’s did to themselves for Portuguese coin was awful and extremely destructive and has destabilized the entire region ever since! The actions of the agents of Belgian king Leopold II in the Congo were insane, aggressively inhumane and near genocidal! but surely the worst influence on Africa has been that of the Arabs and the Islam they imported to Africa. When one looks at the countries of Africa today, the Islamic countries have far worse human rights, violence, development and governmental stability. An excellent example is Nigeria: it’s mostly Christian southern realm is largely stable and relatively well developed, but it’s mostly Muslim northern realm is dilapidated and overrun with violent jihadist groups. The lands of North Africa should be wealthy, stable, developed and powerful since they are close to the trade hubs of the Mediterranean, Suez Canal and west Asia, as well as having a climate desirable for the production of many valuable crops, large and stable populations, easy access to fisheries, diverse and vibrant histories of advanced societies as far back as 900BC, and even large reserves oil and other hydrocarbons! Instead, they are lower-middle income countries with oppressive, authoritarian police state regimes, abysmal conditions for women, SLAVERY even today, weak educational systems, weak government institutions, huge populations of migrants attempting to flee and creating humanitarian crises and political disasters for the European states unlucky enough to have them flooding their shores in cheap inflatable rafts, rampant corruption and rampant violent Islamic terrorism. ALL of these problems can be directly traced back to the influence of Islam, sharia, etc. on the people and the state.
You left out the most important part. It's something like if Kenya can't repay the loan, China takes over control of the port of Mombasa, which they can use for any purpose, including military.
Projection. What military bases has china built in foreign land? Now tell me how many the US has.
What a bullshit load of crap you are talking.
We are capable of paying it
In fact, acquiring a port in East Africa may have been the main goal of the SGR. The Chinese probably realized that the loan could never be repaid. $3B for a major port seems cheap.
@@zeedykim9096 lol....😂🤣😂🤣 where?! We've just defaulted from paying and have been fined 1.3billion. We are enslaving ourselves again just cause our men can't build and develop like the white and asian men. All those studying engineering what have they been good for in Kenya when you still outsource the service?
USA has Trillions of debt more than the what Africa (continent) owes China. NOBODY TALKS ABOUT That. Africa is changing in a hands with China since USA/UK fail to make the deal fair and convenient to pay it back. Korea and Japan too are investing more than before in Africa
This mzungu is behind time, just bitter
Us can generate endless stream of $$ trillions of debts cannot cut it lol
@@vijananarutomovement7625 for the first we both agree 👍🏽 💙💛
Sure they do. That's why you know about it.
If Kenya borrowed in its own currency, it too could have options. But it is near the limit of the debt it can service. The most economically viable projects should be built first.
Under the same logic every road in Kenya is built with a loss and is not profitable, therefore Kenya should not have invested in any roads whatsoever.
All this means is that the debt will take longer to pay off.Atleaast the railway is operational but not as expected.Not only small but also greater nations have debt.So lets not make a meal out of it.With increase in population and infrastructure comes increase in demand and supply which eventually boosts the economy.Also remembering that there are other modes of wealth creation in the nation which aid in lessening the debt not solely the SGR.We are grateful of chinas support to african nations and not exploiting us like other great nations do.Lots of love to my country KENYA.
And then you will see the "quality" of Chinese made infrastructure really means.
Lol so if you can't afford to pay for a car in your head you think u will be able to keep driving it? Trains break if SGR cannot keep up with payments how will it keep up with maintenance? Already the stations are starting to show signs of neglect
@@u-know-this only narrow minded people think like u do.U act as if sgr is the only bread basket of Kenya.Dont bring controversy where there is none..u can't stand that Africa is rising and its riots growing deeper...
Plus we have the commuter sgr train which is gaining traction amd performing quite well...The cargo freight train might be struggling but will surely pick up ...We are not worried as Kenyans ...
As a Kenyan I am worried because whose cost of living will go up? Do the math bro.
Let's hope that WSJ has the capability and motivation in reporting the successful and "not-so" successful things that the western countries have brought to Kenya and the rest of Africa in the last few 100 years...
Railway is a public infrastructure which meant not to be profitable … the economic expansion and growth will indirect benefits the tax coffers of Kenya
Do an update on this.
I recall a Chinese railway worker in Kenya pointing out to some locals that Kenya had a rail infrastructure which was better than China's at independence but instead of developing it and improving it, they let it fall into an unmaintained mess. So, China has to come along and lend it the money to buy Chinese materials (when some could have been purchased cheaper locally or on the open market) and Chinese expertise which again was available from other sources and could have been open to international tender. This a classic debt trap, Kenya will never be free of Chinese debt which can be used as a lever for much needed political support. Neither the reporter nor commentators mention that 20 people were arrested on corruption charges related to this project. Kenya would also do well to examine the many 'tofu' projects in China in which money is siphoned off by the substitution of cheaper materials and less material than quoted for and subsequent collapses of buildings and bridges. When it stops being shiny and new, it might well fall apart.
There is a huge concrete plant in Kenya, but I noticed that the local concrete is fairly weak and crumbly. Maybe they are using bad water (high in salt), but I suspect the concrete itself is very high in impurities. If you look at the SGR, you can see the concrete is very smooth and high quality. I suspect that is why they imported the concrete.
Well stated and thank you. I will look into these 20 arrests. It's amazing how Foreign influencers are used to give God status to Fascist Xi.
Yes, they are fascist but just about pass the communist test also because of their strict rules over property ownership. Of course they will not admit to being Fascists.
China and Africa(Kenya) bond is different from what the media things it is. All the major infrastructure projects done in Kenya we've had a helping hand from the Chinese in cooperation with our local companies and government organizations
public railways can be managed even if they are not profitable but taking national debt to build railways probably not good
Exactly, that's why the US hasn't built a new highway since 1950.
>
The western railways in the United States were largely built with foreign debt, with land given by the government for each mile of track laid. But you can't buy rail with raw land, which is where the foreign debt came. And those railways were hugely overbuilt, and struggled to attract enough freight to make them profitable for many decades.
Often they went bankrupt ---repeatedly.
Did you notice that the Chinese built that rail line on time
As long as the financial World is literally controlled by the Western World, there's little chance in truly developing the Global South under these circumstances. The best way to hedge your bet against incurring massive debt is to accumulate USD. However that is difficult to come by without steeper cost. A MultiPolar financial World with regional nodes is the best solutions to these matters.
What the fuck has this got to do with the Western Word? China isn’t western and it clearly rips people off.
That will never happen.
1. A vast majority of the African countries are corrupt, so any USD you get is sent to white controlled countries for safe keeping, your own leaders don't trust their own civilians.
2. You have nothing to sell that the US or Europe can't get somewhere else, and that somewhere else usually has a robust infrastructure that works most of the time. For example, there is a video here about a Ghanese cocoa maker who is lamenting the fact that they don't make chocolate in Accra. Well you have no milk, you have spotty electricity, rare to find skilled technologists as they have left for the better managed white run countries, and we won't begin to get into things like quality control and cleanliness in these plants, so there is no way in hell these plants would get certified by potential export markets.
3. As long as Africans think like a tribal people and not as a nation, they will be taken advantage of as the West, (and the Chinese for that matter), are very good at playing minorities against each other. Most Africans trust the West more than their own leaders.
The value of this railway to the economy of Kenya is super! How can you count that through maths? Its benefits Kenya in ways we cannot calculate. It is huge!
How do you count the benefits? By saying the benefits can't be counted? If the benefits cannot be counted then the loan can't be justified.
@@pogo1140 Just think about people using this train are saving how much time and energy that can be used for their job and other creating things. It is just like post service, you can't make lots of money by running post offices, but without these how the society will work. Also infrastructure like this railway will attract investment from other countries to Kenya. Is a question of chicken and egg which one comes first.
@@viperwb And to do that you use MATH. You put down on paper the benefits, the costs. Math.
Somehow I doubt the WSJ would criticize this if it were just another highway that cost a fortune.
Only the West sees the BRI as a nuisance. However, the recipient countries sees the benefits of the projects being implemented. Many want them expended.
These projects are not profit motivated
Indonesia's HSR (just started operation), has brought much happiness to its citizens, as it halves travelling time, making for a better quality of life amingst the other BRI projects
An Infrastructure project is like educating a child. This means to empower him to be more productive in future, and then have a better society. Not to expect him to pay back quickly but for a better future.
Very long way to say that Americans want to sell cars to Kenyans and now it’s a bit more difficult
we use the old British system of keeping right..sorry
Western propaganda. The SGR will pay itself. It's just hard times due to Covid and Ukraine war plus drought. The Railway is a great success.
Do you have a source for any of those statements?
❤well said
Tomorrow tomorrow, it's always a day away..😅
How long does it take to pay for a big war?
Many pro-PRC people obviously make excuse that Kenya needs railway. Yes but it's too short.. too expensive.. no transfer of technology.. heavy use of Chinese migrant workers instead of locals. Why don't negotiate Korea and Japan so they all compete, for better price? Japan too basically has started many innovations in railway system.
Keniya should start with just two lines , then increase them gradually. Sudden investment in infrastructure is always spectacular , but mostly loss making work.
It’s kenya not keniya
so you think those land value would Not increase ? after the success of the 1st ?
30- 50 year plan, minimum should be standard. The project is a 100 year + project same as the 'Lunatic' express built by UK in 1800s and still in use. We are judging it as if it's a 3 year repayment project. We will. Repay in due time
Considering the project has made over $600m up to date and it's not even reached Uganda .it has done very well .
@@peterkariuki9475
Umm, no, the loan was not paid back by operations, but from other income from the Kenyan government.
@@JB-yb4wn the official report that the Chinese who are running the operations is that the project has earned ksh 60 b despite COVID.
Enemy of progress
They always hope for bad things to happen in Africa the same way they predicted so much Doom with Corona Virus,it wasn't true
Western people . They don't want Africa to develop.
The PRC got exactly what it wanted…
Lots of good PR, plus Kenya on the hook for a loan which can never be re-paid therefore the PRC will “own” Kenya.
Like how the Europeans stole as much resources as they wanted in Africa and never built anything useful for hundreds of years?
Would rather see this than nations loaded down with Congressional Military Industrial Complex weapons systems. At end of day at least trains actually spur some development. In addition by building when they did avoided the inevitable inflation and monetary failure's of today
Americans are smart, they know that only military spending is real GDP. Infrastructure is fake GDP since it causes debt, and no who cares if the people benefit its all about the making profits.
Apart from a road running parallel to the SGR there is also the old metre-gauge railway line that could have been revamped for a fraction of the cost...
Well that wouldn't be flashy enough for those grubby politicians, would it? I mean how much kick-back could you get on a perfectly viable revamped railroad as opposed to a new, sexy one?
You don't revamp a railway line of over 100 years.Everything has a life span & the old meter gauge railway belongs to the museum.
@@alexandermutune6131
The British have been upgrading that rail over the years. The Kenyans less so. Our railways in Canada are over 100 years old and work fine - because we know how to maintain them.
The Kenyans are not running that railway, so maybe the maintenance will be under the Chinese management, but the Kenyans will be paying for it anyway. If they had maintained the old rail, maybe even changed the gauge, it would have been a lot cheaper than building this one. At least the old railway is already in Uganda, which is a lot more than I can say for the new one to nowhere.
@@JB-yb4wn what is the lifespan of a railway line? It's obvious it Can't last forever & will require almost complete overhaul after sometime.What Kenyans & other African countries need is good infrastructure, mainly roads & railway to enable interconnectivity, trade & hence prosperity.If SGR is good for other countries elsewhere, then it's welcome in Kenya too.It only needs to be expanded to reach all neighbouring countries of East African community nations that use Mombasa port.
@@alexandermutune6131
No, what Kenya needs is less corruption so that these railways can be maintained without people lining their pockets, that is how first world countries work. That is why our railways last a long time because they are constantly maintained.
actually most railroad projects lose money, even France and Spain are losing a lot of money on their high speed railroad. But the benefit of the railroad project will last long time for future generations.
You are comparing developed western countries with Africa👏🏻 bravo
@@ashutoshtare9079 the SGR has not been completed yet to reach its full potential, ,but has already made a revenue of $600 million, at one point you'll have to admit that developing countries won't stuck at that developing phase forever
@@marvin_e still the above comparison is a bit stupid also a comment from a chayaneez bot😏
This is an investment for the future. Without good infrastructure, Kenya would never have a chance for fast development.
We Kenyans really need to listen to our former colonialists. They left us such wonderful legacies like the wisdom in checking with them before we talk to nations which might want to take advantage of us or heavens forbid...colonise us!
😂
I will visit Kenya for get it in this train!
💯🇭🇷
Greetings from Kenya ✌️
Kenyans love the railway, what wrong with you guy.
IT IS CALLED : Now you owe us!!! We OWN/ repossess for our military… what you built us!!
It isn't a failure project, because it has even been open that long. Most businesses give at least a 10 to 20 year timeline, before a project is deemed successful. Besides, if they already managed to pay some of the loan back, that is a success of itself! Give it time!
Most lenders would have a longer loan tenor for this kind of project. Tell the Chinese to provide appropriate terms. The project might actually be viable. BTW, cargo makes money, passenger trains are typically subsidized. Cargo moves cheaper by train than by truck by a facto of three to four times. If it is not, there is incompetent management, political interference and other issues that will prevent Africa from being competitive in trade worldwide.
The reason why SGR has not payed for itself is because of the USD interest rates hikes in every single month since the loan is in USD making loan repayment almost impossible
If you expected cheap interest rates forever, you were bound to be disappointed. And they are going to KEEP going up for several years to come.
@@SeattlePioneer Maybe we should ditch the dollar
@@bdinfo6951 My post:
>
Go right ahead.
A substantial part of the reason for higher interest rates and a higher priced dollar is that people and institutions around the world are buying dollars like crazy because their own currencies are declining in value. This kind of thing makes it difficult for people in the United States, you know.
A good place to start would be persuading people and institutions in your own country to hold your own currency, rather than the dollar.
Take Sri Lanka, Turkey or any number of other countries. They need to buy oil and they need to buy food, and they have spent all their dollars. They are broke.
But your position, if I understand it, is not to look to the IMF for more loans in dollars. They should offer their own currencies to buy fuel, food and other needed products, and to sell their own products only for their local currency.
Perhaps Russia will sell them oil for rubles -but they don't have rubles either.
The thing to move from trucks to railways isn't so simple actually.
->For such transport, more facilities for proper loading and delivering should be arranged. It also costs some bucks in the beginning for the government.
->Then,according to some reports,It shows cargo transported by railways are often mishandled and not safer.
->Even then,for transporting cargo from station to warehouse,we should use a truck again.
I hope the government will soon take up an action plan to make it profitable and not fall into Chinese debt trap.
Kudos Kenya 🇰🇪
U mean as opposed to the IMF loans with exhorbitant interest rates that make it impossible to repay and completely cripple the country?
@@MrChenjinyuan I am not completely sure about this,but as per my knowledge, the IMF loans are more useful bcoz the cost 1-3% interest for 25 yr period whereas Chinese loans cost 6-7% interest for 10 yr period.
So, if Chinese loans are taken,it should be kept in mind that the profits should incur in as shortest period as possible.
So,for long term projects,IMF is more secure.
Let me add a video which shows such problems faced by transports and my country introduced a masterplan to solve it. Take a look at this detailed case study.
ruclips.net/video/M9bhCVqGaOI/видео.html