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Economy

Kenya plans $210 million rail upgrade as SGR phases delayed

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The move is a turnaround for Kenya, which initially planned for the standard-gauge railway (SRG) to go all the way from East Africa’s largest port of Mombasa to Uganda, replacing an existing century-old metre-gauge link.

Sunday 12, May 2019

(Bloomberg) --Kenya will spend $210 million on linking and upgrading older tracks with its new standard-gauge railway as it abandons a plan to extend the Chinese-funded project to Uganda’s border that would have created a faster export route to the Indian Ocean for landlocked neighbours.

James Macharia, the Transport and Infrastructure Secretary, said that of the sum, $60 million will fund a 43-km metre-gauge line that will act to connect the old and new railways.

“We’re looking at options for the railway, we prefer the private sector so there is no impact on the country’s debt and the link will take about a year to complete and trucks will be used to connect the two lines in the meantime, Macharia said.

Chinese contractors are about to complete the second phase of the track near Naivasha and will terminate construction at that point, added Macharia.

Kenya will spend $150 million on revamping the existing metre-gauge railway between Naivasha and Malaba, he said.

 “We shall quickly, very urgently, do a link between the SGR Naivasha and the MGR Naivasha to make sure there is seamless trans-shipment when goods get to Mombasa,” Macharia said.

Kenya borrowed $4.68 billion from the Export-Import Bank of China for the first two phases of the new railway that falls under President Xi Jinping’s Belt and Road Initiative and required about $3.6 billion more for the remaining portions.

The Chinese government also agreed to finance for a data center and an expressway in Nairobi.

The railway is being built by China Road and Bridge Corporation and operated by China Communications Construction Company.

Landlocked Uganda, which intended to extend the SGR from Malaba to its capital, Kampala, will defer those plans until Kenya resumes construction, Monica Ntege, Uganda Transport Minister.

Like Kenya, Uganda will upgrade its existing line from Malaba to Kampala at a cost of about EUR 152 million ($170.3 million), Ntege said.

 

TAGS : Belt and Road Initiative, standard-gauge railway, Export-Import Bank of China, President Xi Jinping

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