Economy
Grand Sh2.1trn plans to expand SGR to Kisumu, Malaba and Isiolo
Monday, May 15, 2023
SGR line in Kenya. photo | I got cured NMG
Kenya has set its sights on a Sh2.1 trillion plan to expand a standard gauge railway (SGR) to Kisumu, Malaba and Isiolo by the end of June 2027, a government document has been seen by the government. The daily business Offers.
According to the plan, the state transport department will build another 2,746 kilometers of SGR at a price of Sh2.1 trillion, a move that will push total spending on modern railways to over Sh2.75 trillion.
The plan, lifted from the government’s Jubilee Grand Scheme on SGR (Kenya’s most expensive project to date), is part of the Sh3.42 trillion Lamu Port South Sudan and Ethiopia Transport (Lapsset).
Lapsset aims to open up northern Kenya and rejuvenate the northern corridor by stimulating movement within Kenya, South Sudan and Ethiopia.
It is an ambitious scheme that would not only see modern railways reach the border town of Malaba via Kisumu, as initially envisioned, but also Iseulu, Moyale and Lamu Island.
The line will go from Mariakani in Mombasa District to Lamu to Isiolo. From Isiolo, the SGR will be linked to the northeastern town of Moyale, which borders Ethiopia.
From Isiolo, the government will extend the SGR to Nairobi, connecting the country’s capital and commercial hub to northern Kenya and finally to Ethiopia.
From Naivasha, the SGR extended to Malaba via Kisumu.
is reading: Tanzania takes on Kenya with Sh271bn SGR link to DRC
The bulk of the funding for these additional SGR kilometers, around Sh1.8 trillion, will be from undisclosed outside financiers while the remainder will come from the Kenyan government.
So far, the SGR from Mombasa to Naivasha has been funded by the Chinese at a total cost of Sh656.1 billion.
The longest of the SGR scheme, 753.2 kilometres, will be from Isiolo to Nakodok, a small town near the border between Kenya and South Sudan.
The Ministry of Transport, headed by Kipchumba Morkomin, commissioned this phase of the SGR at Sh443.2 billion.
From Lamu to Isiolo, a distance of 544.4 kilometers, the Ruto administration plans to build a railway worth Sh348.7 billion.
From Isiolo to Moyale, a distance of 475.9 kilometres, the state is expected to use Sh317.8 billion to build a new SGR line.
The line connecting Mariakani to Plamu, with a length of 325.3 km, will cost Sh257.3 billion.
There will be another 278 km line connecting Nairobi to Isiolo which will consume Sh239.2 billion.
SGR’s Phase 2B from Naivasha to the lakeside city of Kisumu will cost Sh380 billion while the last leg, 2C, from Kisumu to Malaba bordering Uganda, will cost Sh122.9 billion.
The document released by the State Department of Transport reveals what seems like an almost impossible feat for a government that wants to complete the entire Department of Transport in four years from 2023 to 2027.
Although the Ministry document indicates that the construction of these railways will start at the beginning of July this year, no budget allocations have been made for SGR for the next three fiscal years.
In 2014, the government entered into a tripartite agreement with the governments of Rwanda and Uganda to build a standard gauge railway from Mombasa through Kampala to Kigali, Rwanda.
However, the SGR abruptly ended in Naivasha with China refusing to fund the last leg of the modern railway after failing to strike an agreement with Uganda.
President Ruto’s new administration has revived plans to complete the SGR.
Partnering with the Chinese government, Mr. Morcumen said earlier this year that the government wants to extend the SGR from Mai Maheu in Naivasha to the Uganda border through a five-year plan which will see a multi-billion dollar railway pass through Narok, Bumet. , Nyamira, Kisumu, and finally Malaba.
“In the long term, we would like to complete the SGR connection from Sosua to Kisumu via Bomet, Nyamira and parts of Kisii and thereafter to Malaba. Later on, we could consider upgrading the existing MGR via Nakuru to Kisumu and via Eldoret to Malaba,” the CS said in a statement in December 15 of last year.
The Ministry of Transport has allocated Sh100 billion from the Railway Development Fee Fund (RDLF) for the next three years to refurbish the existing SGR line from Mombasa to Naivasha via Nairobi and build new sidings.
The money will also be used to purchase more locomotives and freight cars, intended to improve freight capacity for modern railways that still face stiff competition from trucks.
SGR renewal plans mostly involve building or rehabilitating new meter gauge railway (MGR).
In the 2023/24 financial year, the government plans to spend Sh37.4 billion on connecting these MGR lines to the SGR and purchasing new locomotives and freight cars.
Also read: Tough times for SGR as port operations return to the coast
The country will spend Sh11.9 billion to acquire new rolling stock within the next twelve months.
Kenya last bought 1,620 locomotives and trolleys from China in 2018.
While Kenya’s plan to expand its SGR remains largely on the paper, rival Tanzania, is in an advanced stage of building its own, gaining a foothold in the fight for control of the East African logistics corridor.
At the beginning of the year, Tanzania moved to extend the SGR to neighboring landlocked countries after it signed a Sh271 billion ($2.2 billion) deal with Chinese contractors to build the final section of the 2,102-kilometre line.
This makes the 506 km line the longest stretch of SGR on the continent. The line is scheduled to be completed by the end of 2026.
China’s hopes of resuming funding for the last phase of the SGR have been fueled by reports that Uganda has secured funds from Standard Chartered Bank to begin construction of a modern railway.
Kampala handed over the contract to build the first SGR to a Turkish company after it failed to obtain funds from China.
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