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Daily Nation : January 31st 2014
DAILY NATION Friday January 31, 2014 Opinion 13 INFRASTRUCTURE | Crispine Odhiambo The standard gauge rail project may turn out to be great value for money K enya is a railway nation. The birth of the polity known as Kenya can be directly traced to the construction of the MombasaUganda Railway by the Imperial British East Africa Company over a century ago. It is, therefore, timely that as the country celebrates a half century of independence, it is animated with discussions of another railway. The standard gauge railway project (SGR) has always been touted as a socio-economic game-changer. Credible analysis from a number of institutions including the World Bank, the African Development Bank and the Economist Intelligence Unit are all unanimous that Kenya can reap an economic dividend of between 1-2 per cent in GDP growth by fixing the Northern Transit Transport Corridor, of which the railway is the single most important component. Few can dispute the imperative of the railway. Some, though, have loudly raised questions as to the scope, design, financing and implementation of the project. The public debate on the SGR project brings to the fore the complex nature of huge infrastructure projects and the strain they put on policymakers and implementing agencies. For public bodies implementing a significant infrastructure project such as the SGR, two factors demand special consideration President Kenyatta launches the standard gauge railway project – resource constraint and the value for money imperative. First is the resource constraint problem. Simply put, the country needs to acquire an expensive asset, yet it doesn’t have the money to invest in it right now. The estimated costs of the SGR at Sh327 billion cannot be accommodated within the national budget without cutting funding to other essential services even if it is spread over many years. In such a case, borrowing becomes the most viable option. Given that the sums to be borrowed are substantial, the giver of the loan must be sufficiently persuaded to put money in such a project. International lenders, whether multilateral financial institutions, commercial banks or individual governments have different lending conditions based on their risk assessment. SPRING FESTIVAL | Stephen Mboya Happy New Year to the Chinese people T he Chinese New Year (the Spring Festival) falls today, marking the beginning of the Year of the Horse. The festival marks the first day of the first month of the Chinese lunar calendar. It usually falls somewhere between the end of January and early February. The Chinese calendar is based on the cycles of the moon and each 12 years of the lunar cycle are named after 12 animals: The Rat, Ox, Tiger, Rabbit, Dragon, Snake, Horse, Sheep, Monkey, Rooster, Dog, and Boar. The Chinese born in 12-year cycles share the same animal signs. Those born in 1918, 1930, 1942, 1954, 1966, 1978, 1990, 2002, or 2014, are all under the sign of the horse. Keeping with the ancient traditions and beliefs, the people born in the Year of the Horse are believed to share certain characteristics that relate to the horse. The horse is not only a symbol of travel, but also a sign of speedy success. Those born in the Year of the Horse are believed to be highly animated, active, and energetic. They are typically elegant, independent, gentle, and hard-working. The Spring Festival is the grandest and most exciting period for the Chinese during which they embark on the world’s biggest annual migration. More than 250 million Chinese people board buses and trains to go and celebrate with their families. The scene of passenger transportation in China is remarkable as the people are determined to get together with their families in what has come to be referred as the great annual Spring Migration. The festival, with a history of over 2000 years, symbolises the breaking of a new dawn on the first morning of the New Year. As Christmas is to Christians, so is the Spring Festival to the Chinese – a time for family reunions and good cheer. Candies and nuts The New Year is everyone’s birthday and the Chinese usher it with pomp and colour. The ecstatic populace begins to decorate their rooms. Door panels will be pasted with Spring Festival couplets, highlighting Chinese calligraphy. Shopping stores will be bursting with eager buyers seeking to obtain necessities for the New Year. The commodities and goodies include cooking oil, rice, flour, chicken, duck, fish and meat, as well as fruit, candies and nuts. The Chinese will suddenly become dandies and will be in their best attire. The hair will be neatly cut, new clothes and shoes will be bought as well as gifts for children, the elderly, friends and relatives. The night before the New Year is known as “reunion night”. The reunion dinner is of utmost importance as a time to reconnect with family and recall past events and even map out the future. Although different traditions exist, food and flowers are usually laid out to honour the ancestors. At the stroke of midnight, entertainment ensues with lively rounds of mahjong, dice, or dominoes as families watch the New Year’s gala on TV. They light firecrackers, bidding farewell to the old and welcoming the new. When morning comes, cheerful children will greet their parents and grandparents, and receive money in red paper envelopes. The streets come alive with stunning displays of the vivacious lion, dragon and yangge dancing. The only difference, therefore, between the Chinese Lunar New Year and the Gregorian New Year is the date. Otherwise, the common theme is thanksgiving and celebrations. May the Chinese people be blessed with peace, prosperity and good health, now and in the future. Mr Mboya is a freelance writer who comments on social and international affairs Some institutions and governments are more riskaverse than others. Others have slower and more elaborate lending procedures. Clearly, lending conditions can substantially delay even a financially sound project. Meanwhile, there are other lenders who have shown more flexibility and high tolerance for risk in project financing. For project implementers, therefore, while there may be a number of possible financiers, the choice is restricted to finding a financing source with the capability, and willingness to accommodate a risk of a massive sum of over Sh327 billion to a single project in a single country. This is not as easy as many would like to believe. Indeed, given the risk profile of countries in sub-Saharan Africa, many projects have never left the conceptual stage because of this hurdle alone. The second problem revolves around the question of value for money. The popular view is that public entities get best value by conducting a competitive open procurement process. While this may be true for routine procurement of widely available goods and services, such procurement process does not always yield value for money. That is why our Public Procurement and Disposal Act 2005 prescribes six alternative procurement procedures to the standard open tender. One of the circumstances in which the law permits a THE CUTTING EDGE BY THE WATCHMAN POLLS WILL HAPPEN IN 2018. While he fully procurement entity to use alternative procedures is where financing arrangements in the form of donor funds are meant for project implementation. Getting value for money simply means getting the best possible deal in the circumstance of a given project. Technically, one will consider the risk profile of a project, the available financing, its complexity, and the time available or desirable to implement the project. It is by considering these and other factors as a whole that procuring entities decide on procedures and whether to use options such as design, procurement and construction (commonly referred to as EPC contracts), or add a financing component. It appears the proposed SGR contractor has agreed to arrange financing, conduct design, construct the rail tracks, stations and depots and supply and install facilities and rolling stock for the line, all at a cost of Sh327 billion. I suspect that if one was to undertake a sober analysis of the project based on the technical considerations of risk profiling, its unique circumstances due to the huge capital costs and the potential socio-economic benefits it has for the country, it may very well turn out to be great value for money. Mr Odhiambo is an advocate and partner, Kiptinness & Odhiambo Associates, Nairobi. agrees with Dickson Ogola that Articles 101 and 136 of the Constitution provide for the day and month in the fifth year during which the General Election should be held, Peter Muthoni won’t buy his argument that the next poll should be held in 2017. Says he: “It is the fifth year of the tenure of government. In simple arithmetic, our next elections will be held on the second Tuesday, August 2018. By 2017, Jubilee will not have served its full term.” NOISE POLLUTION . The residents of Loresho Lane in Nairobi have in the last few days had to put up with immense inconvenience as their neighbour puts up a three-storey building, reports Alice Herrmann. From as early as 7am to 8pm, excavations are being carried out, with noisy lorries ferrying the debris away. Following complaints by some residents, the contractor has been arrested twice, but he manages to “sort out the matter” and the racket continues. “The noise and dust is too much. Where is Nema?” KABOGO, MIND THE ROADS! As Kiambu Governor William Kabogo attracts attention with his declaration that unmarried people should not hold elective positions, there are more pressing concerns in his backyard. For Jeff Kihoro, it is the dilapidated roads in the county that are crying out for rehabilitation. He singles out the Ruiru-Uplands road, which traverses Githunguri Division, a productive area for dairy and general farming. “Can Transport Cabinet Secretary Michael Kamau intervene?” pleads Jeff. OIL POLLUTION. His once beautiful Cabro-paved compound is in a mess, thanks to used engine oil spill deposits, but Nairobi resident Hasmukhlal Shantilal Shah is about to despair, having tried in vain to remove the dirt. Shah is, therefore, appealing to oil industry gurus or other experts who know how to clean up after such a mess to give him, and he believes, many other people in a similar predicament, tips on how to do it. But being a man still stuck in the snail’s post days, he can be reached through P.O. Box 47571-00100, Nairobi. JUA KALI A NUISANCE. A resident of Keroka township in Nyamira County is not convinced that the National Environment Management Agency officials on the ground are unaware of what a nuisance jua kali artisans have become. Welders, he adds, do their work on pavements with no regard to the safety of businesspeople in the town and passers-by. He worries about sparks flying from the welding machines and the fumes from spray painters, and wonders why they shouldn’t be allocated a site away from the shops. A banner advertising Multichoice Kenya EXPLAIN ANOMALY, MULTICHOICE. A Nairobi- based DStv subscriber, Wainaina Githi, would like to know from Multichoice Kenya whether the Pay TV freeto-air policy involving local channels does not apply to them. He has noted that whenever his monthly subscription lapses, he is promptly shut off from all the Pay TV channels and also cannot receive the free-toair broadcasts from local stations. “Can they, please, clarify?” he pleads. His contact is wainaina.githii@uon bi.ac.ke. Have an accessible day, won’t you! E-mail: firstname.lastname@example.org or write to Watchman, POB 49010, Nairobi 00100. Fax 2213946.
January 30th 2014
February 1st 2014