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Standard Gauge Railway to boost Kenya's economy by 1.5 pct

26 January 2015, 08:32

Nairobi - The Standard Gauge Railway (SGR) that is currently under construction will raise Kenya's Gross Domestic Product (GDP) by 1.5 percent annually when complete, President Uhuru Kenyatta said on Friday.

He said the railway line which is expected to be complete before the end of 2017 will lead to increased volumes of the country's national and international trade.

"This single project alone will raise our GDP by 1.5 percent and that can enable us to achieve growth rates of even 8 percent because we are now at growing at 5.8 percent," Kenyatta said during an inspection tour of the trial section of the SGR at Mtito Andei which approximately 200 kilometers south of Nairobi.

Phase one of the project involves construction of a 472 kilometer railway line from the coastal town of Mombasa to Nairobi. The next phase will be a 505 kilometer railway line from Nairobi to Malaba town on the Kenya-Uganda border.

According to the Head of State, the construction will create thousands of jobs for Kenyans.

"It will lead to the economic transformation of the country," he said.

Read Also: Mombasa leaders fault standard gauge railway compensation policy

The infrastructure project is also expected to train at least 400 engineers and technicians, who will be available for future local and regional railway developments.

China Roads and Bridges Corporation (CRBC) is undertaking the project at a cost of 3.8 billion U.S. dollars.

Kenyatta added that CRBC has already built two factories to produce rail sleepers and other parts required to build the railway.

"That means that even when the project is complete, there will still be jobs along the railway route," the President said.

The railway is expected to inject significant capital into Kenya, following a government directive that 40 percent of project cost be procured locally.

The government will also spend approximately 88 million dollars on the acquisition of land for the project.

Cabinet Secretary in the Ministry of Transport and Infrastructure Michael Kamau said the SGR will make Kenya an attractive investment destination by reducing the cost of transportation.

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- Xinhua


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