Extending Kenya’s SGR line to Uganda makes economic sense



Recently there was an indication that Uganda was contemplating the implementation of the abandoned plan for a standard gauge railway (SGR) project from Malaba to Kampala and on to Kasese.

I believe Kenya should build on this or any other opportunity offered by Uganda to implement the original plan to extend the current Mombasa/Naivasha SGR to Malaba.

An uninterrupted transit of goods from Mombasa all the way to Malaba and Kampala and also beyond will reinforce project economics for the existing SGR and enable it to be financially sustainable.

Further, the productivity of the Mombasa port should be concerning us when we consider the growing competitive edge enjoyed by Dar es Salaam port, which has snatched most of Rwanda's transit business from the Kenyan port.

With the increasing significance of the DRC as a regional trading partner, it is important that Kenya maintains a fair transit capacity advantage through an efficient and competitive rail system serving not only Uganda but also the DRC and South Sudan.

And any new SGR project should be configured electric, not diesel, as the future of transportation worldwide focuses on electricity from renewable energy.

READ: Uganda builds railway link to Kenya's SGR

Labelling and implementing the project as electric and green will increase opportunities to fund it with Western capital.

The Mombasa to Naivasha section will at some point in the future also be compelled by environmental considerations to go electric.

Many lessons, I am sure, have been learned by Kenya from past goofs made on the funding and operating models of the Mombasa-Naivasha line.

Any SGR extension from Naivasha should be implemented competitively as a PPP, preferably as a separate entity from the current Mombasa-Naivasha line so as to demarcate areas of 'old' and 'new’ financial and contractual accountability.

In 2013 the Jubilee government made an ambitious attempt at regional infrastructure cooperation with Uganda and Rwanda, which included petroleum and railway infrastructure connectivity.

Virtually all of them came to nought as regional circumstances and priorities shifted.

The proposed Uganda-Kenya joint crude oil pipeline shifted to an Uganda-Tanzania routing instead of termination at Lamu.

The rationalisation of petroleum products infrastructure between Kenya and Uganda abruptly stopped after the crude oil pipeline stalemate.

Rwanda appears to have decided to align its import/export infrastructure with Tanzania, which has been ongoing.

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The Kenya-Uganda SGR project encountered funding and implementation complications with the Chinese.

The current Kenyan SGR is still a work in progress until it is finally linked to Uganda, for indeed it will improve overall project economics while multiplying regional trading opportunities for Kenya.