EDITORIAL: Private sector should be encouraged to invest in SGR

This week, Kenya inaugurated the long awaited Standard Gauge Railway (SGR) link between Nairobi and the port city of Mombasa. That is just a tip of the iceberg: The railway line aims to link all East African countries, and as the first Kenyan phase has shown, it is a boon for businesses. Already the cost of transporting a container from Mombasa has reduced in recent years by nearly a half; from $900 to $500, and transit time reduced by three times. A major infrastructure project like the SGR costs money, lots of it. The Rwandan part of the deal is still on the drawing board, at least until July when feasibility studies will be completed. When that line has been crossed, the biggest hurdle that will confront the government is where to get funds for its implementation. Could it be time to test how far the much talked about Public Private Partnership could go? Could the idea be sold to private investors so that they could also own a piece of the pie? Many people, especially in developing nations, have a tendency of leaving the implementation of major infrastructure projects in the hands of the government. What many fail to understand is that infrastructure is a lucrative business. Most railroads in the developed world are privately owned and are run as businesses, why can’t it be replicated here? This is one serious area that those in charge of kick starting the construction of the SGR could explore; inviting private institutions and individuals to invest in the project. That way, they will have ownership and make sure it is operated properly and efficiently, because, in the long run, they need handsome returns from their investments.

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EDITORIAL: Private sector should be encouraged to invest in SGR