Kenya, China sign standard gauge railway agreement

Finance Cabinet Secretary Henry Rotich (Seated Right) with Chinese Minister of Commerce Gao Hucheng signing Standard Gauge Railways constriction agreement at State House Nairobi on May 11, 2014. Five presidents witnessed the signing. PHOTO/BILLY MUTAI

What you need to know:

  • The SGR is expected to cost Sh327 billion for the 609.3 kilometre Mombasa-Nairobi phase with China's Exim Bank funding 90 per cent of the project
  • Speaking after the signing ceremony, President Kenyatta said Kenya “has found an honourable partner in China”

Kenya and China on Sunday signed an agreement on the financing of the first phase of the standard gauge railway project.

The agreement was signed by Finance Cabinet Secretary Henry Rotich and his Chinese counterpart Gao Hucheng in the presence of five heads of state.

President Uhuru Kenyatta of Kenya and Chinese Prime Minister Li Keqiang with Presidents Yoweri Museveni of Uganda, Paul Kagame of Rwanda and Salva Kiir of South Sudan witnessed the signing in a ceremony at State House, Nairobi which was the climax of Mr Li's three-day visit to Kenya.

The SGR is expected to cost Sh327 billion for the 609.3 kilometre Mombasa-Nairobi phase with China's Exim Bank funding 90 per cent of the project while the other 10 per cent will be provided by the Kenya government.

The standard gauge railway is aimed at providing efficient and cost effective rail transport for both freight and passengers. It is intended to reduce the cost of doing business by reducing the cost of transport, a move that will see Kenya become a competitive business hub for the East African region and beyond.

Passenger trains will have a speed of 120 kilometers per hour while those for freight will be designed to move at 80 kilometers per hour. It will take passengers four hours and 30 minutes to travel from Mombasa to Nairobi while freight will take eight hours. The project is slated to kick off on October 1st and will take 42 months to complete.

Speaking after the signing ceremony, President Kenyatta said Kenya “has found an honourable partner in China”. He thanked the Chinese government and leaders of the East African region for partnering with Kenya in developing infrastructure.

President Kenyatta said Kenya would continue making development strides in partnership with dependable friends.

“We have shown our ambition. We have rejected the mediocrity of simply sticking with what we have. We have found partners of equal determination. It now falls to us to complete the project as rapidly as we know we can,” he said.

The Chinese Premier emphasized that China’s engagement with Kenya and Africa as a whole was based on a concept of mutual benefit.

He said closer partnership between Africa and China with a combined population of more than 2.4 billion people “can change the landscape of global development”.

Mr Li said China’s partnership with Africa was more than co-operation on single projects but was “a communication linking the hearts and minds of people”.

He called on all Chinese companies involved in the project to ensure they supply the best equipment and adhere to all local laws, adding that the Chinese firms will be required to transfer skills to local workers and be meticulous in their roles.

President Museveni who spoke on behalf of the visiting Heads of State spoke of China’s long friendship with the people of Africa.

“China has stood with the people of Africa since 1949 in the anti-colonial struggle. It was only the Soviet Union and China who supported Africa when it was colonized,” he said.

In what could be considered criticism of Western nations, President Museveni said of China's partnership with African countries: “China is concentrating on real issues. They don’t give lectures on how to run local governments and other issues I don’t want to mention.”

The agreements for the construction and financing of the project were signed by National Treasury Cabinet Secretary Henry Rotich and the president of China Exim Bank Li Ruogu.


On Saturday, the first agreement signed between Kenya and China was on economic and technical cooperation approving grants of undisclosed value.

Chinese Minister for Commerce Gao Hucheng and Cabinet Secretary Rotich signed the agreement on behalf of the two countries.

The two further signed an agreement of undisclosed value of interest-free loans to be offered to the Kenyan government by China and a framework agreement on the provision of concessional loans.

Transport Cabinet Secretary Michael Kamau signed a memorandum of understanding on aviation cooperation with his Chinese counterpart Gao Hucheng.

In the Agriculture sector, Cabinet Secretary Felix Koskei and the Chinese Foreign Affairs minister Wang Yi signed an MoU on agricultural cooperation with the financial interests undisclosed.

Other MoUs on health cooperation, forestry and ecological conservation, and establishment of a cultural centre were also signed.

Educational issues which are part of Mr Li’s high-profile visit saw an MoU on the establishment of an ultra-modern joint laboratory for crop molecular biology signed which will cost Sh5.1 billion.

Also signed was a concessional loan agreement on Nairobi’s 132 KV and 66 KV network upgrade reinforcement phase II project which will see the Chinese government provide support to increase electricity supply.