MugundaMan wrote:vvs wrote:Let's start with #1
Ndii does say in an interview that SGR has missed on both the financial and economic fronts.
Financial means turning a profit. It's still Year 2 so it may be early to hope for a profit but it does not seem optimistic. I hope we can see some audited statements soon.
In 2014, he suggested we choose the much cheaper option of rehabilitating the NGR.
Jobs - The 40k jobs were a short-term boost. How many of those involved skills other than mtu-ya-mkono?
The question is how many permanent jobs did the SGR create?
Then ask how many NET permanent jobs did the SGR create?
Forcing freight from road transport and NGR also caused a loss of jobs in those sectors/entities/firms.
IMHO, a dual road combined with an upgraded NGR would have been a better option for us.
I have no info on Uhuru Highway, Sasamua Dam, etc. All projects should have a thorough cost-benefit analysis done. Mistakes will happen but IMHO the unviability of the SGR wasn't a mistake but deliberate.
2) Debt by itself is neither bad nor good. What can be problematic is debt that is unsustainable.
Debt service for a public project that does not cover its financial or economic cost means it will be funded from the public purse which means something else gets under-funded be it education or a road.
Was building the SGR (vs a dual highway + NGR) the best course of action for Kenya?
IMHO, no.
3) What happens in other countries should be looked at but merely as a guide. Rather than the USA, I prefer we look at Singapore or other Asian countries which were also "poor" in the 60s.
Regarding KCB opening a branch in the US. It's an economic decision. Unless KCB can attract large numbers of the diaspora, a US branch/subsidiary may not make sense given the level of competition.
Mizuho/Sumitomo/MFUG from Japan catering to Japanese businesses eg Toyota, Honda, etc
Societe General/Natixis/Credit Agricole to the French
Bank Leumi of Israel has a presence in the USA but there's a large Israeli/Jewish population it can tap into.
State Bank of India has a presence catering to the Indian diaspora and businesses.
https://www.baruch.cuny....reignbanks-domestic.htm
"
Foreign banking institutions, which include foreign bank branches, agencies, and U.S.-chartered bank subsidiaries,
hold approximately one-fourth of all commercial banking assets in the United States."
https://www.newyorkfed.o...fed/fedpoint/fed26.html
As for what other countries subsidize or not is generally not relevant to this discussion. If you were comparing KQ to Air Tanzania or Ethihad or Ethiopia then we could discuss subsidies.
This is not a discussion about capitalism or socialism either. Even if it was, it would be prudent for any economy to get the best (financial, economic, social) value for any project.
OBOR - This is a China led project primarily designed to benefit them. If others benefit then so be it but that's not the primary aim.
Finally, Kisangani. You said the SGR will reach Kisangani in 10 years so I am holding you to it.
As I said, I am more interested in discussing facts and having a mature discussion that enlightens all that participate in it.
Ha ha ha ha ha, are these your SERIOUS responses
?
My fren you are very funny!
1. You STILL do no seem to have wrapped your mind around what public goods are (Economics 101)
2. You seem not to understand very basic economic concepts like spillover costs and spillover benefits, the multiplier effect and why infra led growth - the Chinese model- has lifted well over 500 million people out of poverty in China at the fastest rate of any economy in human history. And why said model is working beautifully for Africa as our GDP growth rates have shown.
3. You still do not understand how the US economy and banking system works. Ati KCB is not in NYC because there are no customers there?
. My friend there are over 1 m Kenyans in USA!! Where do you think our largest source of forex comes from? Ati pointing to obscure tiny shell banks and b2b banks as examples..LOL!TELL US how many ORDINARAY AMERICANS ..over 300 milllion of them ..bank with any of those banks. The US banking system is as good as a CLOSED MONOPOLY so please do not tell us GARBAGE about SGR should not have rules about cargo deliveries!
This the problem with debating someone with little formal economics training. Those are the fellows Oxford Ndii loves to be on his bandwagon. So he can bamboozle them.with laughable falsities ati SGR must turn a a cash profit in our lifetime, without asking for the same from public goods like Thika Superhighway, Nyali Bridge and Outer ring road
7.1.2 Costs - The costs taken into account are the Road Agency costs in the “with” and
“without” project scenarios which include both the cost of maintenance and the investment
costs of upgrading the project road to a higher standard facility. These costs include the base
cost for civil works plus the physical contingencies, consulting services for supervision and
project audit. The financial contingencies are not taken into account, as they do not constitute
consumption of economic resources. The economic investment cost has been estimated at
KES 11.028 billion and would be disbursed over three years from 2008 to 2010. Residual value
at the end of project life has been assumed at about 10% of original economic investment cost.
7.1.3 Benefits - The main project benefits in the economic evaluation include vehicle
operating cost savings, travel time savings for passenger and cargo, and road maintenance
savings. Accident costs savings have not been quantified due to lack of valuation parameters
for accidents. Nevertheless, accident cost savings would be substantial given current high
accident and fatality rates. Savings in motorized vehicle operating cost over the project’s
operating life of 2011 to 2030 at 2007 prices have been estimated at KES 27.055 billion while
the savings in passenger and cargo travel time costs have been estimated at KES 57.571
billion. About 84 percent of the project benefit is due to time savings for passengers and cargo
while only 16 percent of the benefits are due to savings in vehicle operating costs.
7.1.4 Results of Cost-Benefit Analysis - The results of the economic evaluation using the
HDM-IV has resulted in an Economic Internal Rate of Return of 30.4% which is higher than the
current opportunity cost of capital in Kenya of 12.0%, agreed between Government and Kenyan
Development Partners for admission of projects in the Road Sector Investment Program
currently under finalization. Project investment worth in the base case scenario of NPV at KES
18.670 billion also confirms the viability of the intervention in the project (see Annex 4).
Cost benefit analysis in the appraisal report for Thika Superhighway. Where is SGR's?
https://www.afdb.org/fil..._-_Appraisal_Report.PDF