Plans by the national railway operator—Kenya Railways Corporation (KR)— to build high speed rail lines across the country could further sideline the Rift Valley Railways—a South African consortium— that runs the current passenger and freight service.
KR is seeking to construct a standard gauge rail system to replace the 100-year- old rail line that was laid by the colonial government which has been a lifeline for the manufacturing sector in Kenya and Uganda but has proved inefficient in handling increased cargo flow from the Port of Mombasa.
The inefficiencies of the railway system led the governments of Kenya and Uganda to sign a concessionary deal with the South African consortium—Rift Valley Railways in 2006 to turn around rail services in the region, but it soon ran into trouble after recording losses.
In the concession, RVR was to run the 900-kilometre Kenya-Uganda railway line up to 2031 for freight and 2011 for passenger services. Attempts by the government to annul the RVR deal to manage the railway line led to a court tussle.
RVR narrowly avoided cancellation of its 25-year concession in August when the high court granted it an extension to run the railway system despite the government having obtained orders to end the contract.
The managing director of the KR, Mr. Nduva Muli, says plans to build a new standard gauge rail network will not affect its concessionary agreement with RVR.
“The concession agreement with RVR does not stop KR from building a new railway outside the conceded assets since it is evident that the operation of the current railway even after upgrading and taking all optimisation measures, is unable to meet the demand,” said Mr. Muli.
During the 2009 financial year the port of Mombasa handled 17 million tonnes of cargo. Kenya Railways projects that by the year 2030 the port will handle over 30 million tonnes.
“The existing metre gauge railway operated by RVR has limitations in terms of maximum capacity and efficiency. Therefore KR is planning ahead to meet the transport demands of the country and the region by commencing the programme for the development of the new high capacity standard gauge railway” said Mr Muli.
The government-owned KR has issued an international tender seeking companies or organisations to provide advisory services and a preliminary design of the proposed standard gauge railway line between Mombasa and Malaba with a branch line in Kisumu.
The Corporation is seeking companies or organisations to design the proposed new standard gauge rail line, in a move that analysts said would alienate the RVR from rail transport business.
Mr Muli however says RVR will be incorporated in early discussions to find a way forward in the building of the standard gauge rail network.
“Discussions are being held with the concessionaire to agree on the way forward. In addition one of the Terms of Reference for the transaction advisor will be to advise KR and the government on how best to handle matters pertaining to the existing concession during construction and operation of the new Standard Gauge Railway” said Mr Muli.
Mr. Muli is expected to tell a news conference today that the construction of the standard gauge rail line will start in May 2011.
“The government intends to enhance capacity in the transport sector to improve efficiency, cost effectiveness and competitiveness of the sector to facilitate rapid economic growth” Kenya Railways said in its international tender announcement.
“It is envisaged that the railway line will be extended to Uganda and the Great Lakes region,” said Kenya Railways.
According to the railways company, the planned railway system will revolutionise the transport sector as the railways company intends to introduce 160kph speed passenger coaches and 120kph freight wagons.