Major ICD at Naivasha will greatly boost SGR viability

When Uganda announced that it has dropped plans for an SGR (Standard Gauge Railway) and that they will rehabilitate the old narrow Metre Gauge Railway (MGR), it became evident that Kenya has to scale down its SGR ambitions, at least in the near term... This is in the absence of clear indications, for both Uganda and Kenya, of funds availability for an SGR infrastructure all the way to Kampala.

Kenya plans to complete its SGR from Mombasa to Naivasha by mid next year, after which the focus should shift to maximising value for the SGR investments already on the ground, while exploring the best funding options for the line extension beyond Naivasha.

By deciding to modernise its old MGR, Uganda by implication plans to maintain links with the Kenyan old railway. How to increase and maintain Mombasa Port attractiveness to Uganda, using a combination of SGR, MGR and road haulage, should be the immediate guiding questions for Kenya.

Developing a major ICD at Suswa (Naivasha) and linking it with the MGR (say at Longonot), will create an ideal and effective convergence of the three modes of transport at Naivasha. If indeed Uganda will upgrade its MGR network, Kenya should likewise modernise its MGR section from Naivasha to Malaba. This will increase service assurance and safety. A redesigned road access from the Naivasha ICD to the main highway will also be necessary.

The final product will be a Naivasha logistics hub of choice handling transit imports and exports, and also exports/imports for western parts of Kenya. Travel distances by importers/exporters will be shortened, and specifically the Nairobi ICD clutter and city congestion will be avoided.

The Naivasha project will give Kenya and Uganda some breathing space to analyse pros and cons of extending the SGR from Naivasha to Kisumu or to Kampala. It will also allow reflection and analysis of the best modalities for funding the projects. It will further give Kenya time to fully understand the implications of the ongoing regional logistics projects that may impact our plans for the SGR.

In fact, the Tanzania SGR from Dar es Salaam has started and China has nothing to do with its funding. It will be financed by government, multilateral lenders, and private banks. The destination is Mwanza with a major intermediate ICD at Isaka to service transit exports/imports for the neighbours to the west.

A Mwanza SGR terminus will permit ferry haulage across Lake Vitoria to Port Bell near Kampala, a service which is the mirror image of the planned Kisumu SGR terminus. An SGR terminus at Kisumu will be competing with Mwanza, or by extension, Mombasa will be competing for Uganda cargo with Dar port.

Then there is the Rwanda SGR project which is more or less confirmed and this will link the Isaka ICD in Tanzania with Kigali. Rwanda and Tanzania have agreed that their SGRs will be electric. In effect the Tanzania/Rwanda SGR linkages imply that Rwanda, Burundi and the southern parts of Eastern DRC will essentially be ring-fenced for the Dar port.

The game plan for Kenya should be to ensure that Uganda, South Sudan and the upper parts of Eastern DRC are wrapped up in the Mombasa corridor logistics systems (SGR, MGR and roads). It should be a Kenya/Uganda partnership driven by quality of service, knowing very well that Uganda has the Dar options.

Uganda and Tanzania will be jointly constructing a crude oil export pipeline from Western Uganda to Tanga port in Tanzania. The project will move thousands of tonnes of construction materials from the coast, which will necessitate upgrade of road infrastructure in northwestern Tanzania and into western Uganda. The implications of this newly created conduit from Dar into Western Uganda should not be ignored by Kenya.

Kenya definitely needs to study the regional infrastructure developments and re-orient its regional infrastructure diplomacy to specifically ensure Kenya maintains an edge in respect of Uganda and indeed South Sudan transit logistics.

In the meantime, we need to urgently finance and develop an efficient mega ICD at Naivasha to reinforce Kenya’s existing transit logistics advantages.