The government is scouting for private financiers to take up at least Ksh 130 billion out of the total cost of constructing phase 2A and 2B of the Standard Gauge Railway set at Ksh 645 billion ($5b).
Roads and Transport Cabinet Secretary Davis Chirchir says the government is exploring the option of freight concession which will see private investors buy SGR rolling stock such the engines, passenger carriages and freight wagons in a bid to ease burden on the exchequer by reducing the cost of constructing the railway.
“We are seeking freight concession the way we build a road. We want to build the rail and get investors to do the rolling stock and we concession the freight that way instead of spending an extra $500 million r $1 billion we leave that to the private sector and we do what the private sector cannot do,” said Chirchir.
Speaking during the Northern Corridor Transit and Transport Coordination Authority (NCTTCA) 37th Ministerial Meeting in Nairobi, Chirchir said already the government is in talks with United Arab Emirates state owned firm, Etihad Rail to take up freight concession.
“We are working with a number of countries. We are working with Etihad Rail, they have got interest. They are looking at the volume of cargo and they are interested in 17 million metric tonnes and for them at that volume, they will break even,” he stated.
According to Chirchir, the government has already completed feasibility studies and mapping of the route and is no undertaking land compensation for project affected persons.
Kenya expects to synchronize construction of its rail line with Uganda which is currently conducting feasibility on the line which will link with the Kenyan line at the Malaba border.
Uganda Railways Corporation (URC) Managing Director Benon Kajuma who is also the outgoing chairman of NCTTCA, Uganda is targeting to begin construction of its electric SGR from Malaba to Kampala at a cost of €2.7 billion (Ksh 405b) and will cover 270km.
“In Uganda we are doing it in phases, the first phase we are doing from Malaba to Kampala adistance of 272km then we are proceeding to the border with DRC and Rwanda in the second phase and third phase we will start from Tororo in the eastern part to South Sudan,” said Kajuma.
Through NCTTCA the East African Community (EAC) member states under the northern transport corridor are seeking to harmonize regulations in the sector, customs and immigration and deploy strategies which will see the regional rail network take up at least 60pc of 40 million metric tonnes of cargo moving through the Port of Mombasa from the current 20pc.
