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Battle lines drawn: Kenya standard gauge rail

Prof. Dr. Wolfgang H. Thome, eTN Africa Correspondent  May 18, 2016

It is now patently clear, following comments made by Kenya's Transport Cabinet Secretary James Macharia, that the development of the Standard Gauge Railway, in short SGR, between Nairobi and the Ugandan border stands on knife's edge.

The battle lines are drawn across East Africa after Tanzania's Central Corridor rail development has emerged as front runner to link Rwanda and Burundi, and perhaps even Eastern Congo with their inland dry port of Isaka, towards which a new SGR line will be built by Chinese companies.

That leaves the proposed Northern Corridor line - the section from Mombasa to Nairobi, racing towards completion already ahead of time - which was due to connect Nairobi through the Rift Valley and the Ugandan border at Malaba with Kampala and on to Rwanda trailing in the wake of its rival line and has brought Kenya's bean counters to the scene again.

“If Rwanda opts out of the Kenya-Uganda-Rwanda SGR rail project, then cargo volumes between Mombasa and Uganda will reduce. The Rwandans could either use Kampala as a railhead and then transport their goods onwards by truck, or otherwise just concentrate on the shorter route to Dar es Salaam. It puts Kenya in a dilemma. Apart from that, the present rail line is improving rapidly and has reclaimed market share. This will also be a viable option for the Rwandans to at least see their goods come to Kampala.

“The Mombasa to Nairobi rail line has progressed very fast and will definitely be ready by next year. However, that was in engineering terms the easy route part of the project. What comes next is a challenging entry into the Rift Valley, crossing it and then making it to the Ugandan border. I think Macharia made no sense when he suggested the rail line could terminate in Naivasha, that is utter nonsense and cannot be financially justified. But taking the rail line to Kisumu, that is another matter entirely. It would open up Western Kenya and boost the economy of a part of our country which in the past has been neglected. I understand that a new lake port will be constructed in Kisumu and that means that rail ferries could, like in the old days, connect Kisumu with Port Bell in Uganda or their new lake port they are planning. Therefore, if true, it will also leave Uganda with little choice but to then build a link from their border to Kisumu at their expense, if they want to have SGR operations all the way from the Port of Mombasa to Kampala.

“To make it even more difficult for the Ugandans, will be the fallout of the pipeline deal they struck with Tanzania. Kenya is now looking at South Sudan to join hands with them for a pipeline project. South Sudan is also part of the signatory countries for the LAPSSET project. LAPSSET stands for Lamu Port, South Sudan and Ethiopia. The new port of Lamu is supposed to become a major oil export port for East Africa and also link to the region by railway and highway and notably pipeline. So if Kenya gets South Sudan on their side, the Juba government can still get their rail connectivity but also a viable oil export route. They can sooner or later reduce exports via Khartoum and Port Sudan and be less vulnerable to political games by Khartoum Sudan. Uganda's decision to shift their pipeline route and Rwanda's decision to link their rail ambitions with Tanzania has been a game changer. It will be interesting to see which of the rail projects will take off and survive and which will be abandoned or at least in part shelved,” wrote a Kenyan source close to the present rail operator, Rift Valley Railways. Given such a scenario, RVR must be quietly enjoying themselves as their nearly US$300 million investment in upgrading the narrow gauge railway from Mombasa via Nairobi to Tororo and Kampala now seems the smartest thing they could have done. They added 20 new GE locomotives to their fleet over the past 1 1/2 years and also imported hundreds of new wagons to facilitate longer trains and allow for faster speeds.

RVR, short for Rift Valley Railways, is now in full compliance with the terms of their concession in regard to payments to the 2 governments, the increase in cargo carried from and to Mombasa, and can even expect a major windfall as they are due for compensation for loss of business when the SGR goes into operation. Here in particular, a clause was written into the SGR contracts that raised the strength of their potential legal case. The clause reportedly gifts the SGR operators a certain percentage of cargo carried out of the Port of Mombasa. This, if and when implemented, will cut into the cargo potential of the present narrow gauge railway and thus constitutes a prima facie case for compensation.

Kenya's Cabinet Secretary for Transport, James Macharia, may now wish he never had commented the way he did, but Pandora's box is now wide open, the lid initially lifted by both Uganda and Rwanda and then, through the comments made by Macharia, thrown away altogether.

Few comments have yet to emerge in regard to using the new SGR railways in Eastern Africa for the transport of people, something tourism operators were looking forward to with keen anticipation.

“I have always said that our Lunatic Express should be revived as a luxury tourist train. Look how successful the trains in South Africa are or in India for instance. Running 2 or 3 train services with the old equipment on the RVR line between Nairobi and Mombasa is just nostalgia. Most tourists are not keen because of the long journey, the lack or reliability, lack of facilities like air conditioning in carriages, a first-class restaurant service, etc. We have such potential but none of the rail operators seem intent to tap into the passenger potential, leave alone offer a five-star tourist rail service,” commented another source, a senior tourism stakeholder from Nairobi, in closing.

Battle lines drawn: Kenya standard gauge rail

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