The completion of phase II of the Standard Gauge Railway now hangs in the balance after the financier, China Exim Bank cut the funding by Sh42 billion, citing the obstruction of the project by numerous court cases.
Supplementary budget documents presented to Parliament indicate that allocations to the railway project was trimmed by Sh42 billion, including the Sh32 billion held back by the lender.
“The State department had projects such as Nairobi-Naivasha SGR allocation reduced by Sh42 billion of which Sh32 billion was from a donor because of court cases, while Sh10 billion railway development levy fund was re-allocated to Mombasa-Nairobi SGR project,” the supplementary budget II says.
In a statement, MPs said “the reduction in funding for the project could result in delayed completion and increase in interest and other claims on delayed payments and increased costs of projects than originally planned.”
Phase II project, which runs from Nairobi to Naivasha has faced multiple hurdles since work on it commenced last year. Cases filed by environmentalists opposed to the line’s passage through the Nairobi National Park are some of the challenges that have derailed the mega project.
Last September, the National Environment Tribunal temporarily halted construction works on the section until a dispute challenging it is heard and determined. The phase covers the 120-kilometre distance between Nairobi and Naivasha and cuts through the Nairobi National Park.
When complete, the 150billion line will connect to the recently finished Mombasa-Nairobi segment and later to Kampala in Uganda via Naivasha, Kisumu and Malaba.
