Opinion & Analysis
Railway revamp a brave and timely move for Kenya
A stable demand: The existing railway network is rundown and may be out of tune with the technology and needs of today. Photo/FILE
I see a case where the new railway system has terminals at Jinja and Kampala and possibly extends to Kabale for Rwanda and Kivu region, while another terminal is at Kasese or Fort Portal for the emerging oil fields and the upper part of Eastern DRC.
A terminal at Arua or Gulu will provide easy access to Southern Sudan.
KRA and URA can work out logistics and documentation modalities that safeguard tax revenues for the two countries.
To provide integrated support for the new look rail line initiative, attention should not be immediately diverted from Mombasa Port to a new proposed port at Lamu.
The full potential for Mombasa Port is not exhausted as capacity for development exists to the furthest end of the Harbour.
Modernisation and expansion of Mombasa Port should go hand in hand with the design and development of the high capacity rail line to Uganda.
A business and financial model for the project should invariably have private sector content in it, with probably a 49/51 government/private shareholding.
The venture may not even need to concession if it can professionally operated as a business.
The two governments can raise cash from their Bond markets to supplement their cash input, in addition to getting long term guaranteed finance from international lenders.
A project based on the two countries rail network that outreaches the neighbouring countries is likely to positively attract international and private financing more than a line terminating at Malaba.
A line from Lamu to Southern Sudan is questionable and premature at this moment in time, since the political set up of Southern Sudan is yet to crystallise .
It is more prudent to initially target the Southern Sudan transit business from Mombasa through Uganda, and thus augment the economics of the main Kenya-Uganda rail system.
None at this moment can explicitly tell what political shape and orientation Southern Sudan will take.
South may even decide to make the good political sense of cooperating with the North and make Red Sea their preferred trade route.
Good economics always prevail over bad politics eventually.
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