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Shipping & Logistics

Kenya gets Sh155bn loan from Chinese bank for phase two of railway project

The ongoing construction works of Standard Gauge Railway. FILE PHOTO | NMG
The ongoing construction works of Standard Gauge Railway. FILE PHOTO | NMG  

Building of the 120km Nairobi-Naivasha standard gauge railway is on course after Kenya secured Sh155.5 billion from the Exim Bank of China.

The contracted builder, China Road and Bridge Construction, will move on site between July and August.

“Phase II of the SGR from Nairobi to Naivasha is also on course. Route identification for this second phase of the project as well as identification of affected persons have been done and NLC (National Land Commission) is currently doing valuation of land in a bid to relocate people from the identified route,” states Economic Survey 2017.

The SGR route passes through Nairobi, Kajiado, Narok and Nakuru counties.

The new line links SGR to Naivasha’s planned special economic zones and the Olkaria geothermal fields, making it possible in future to upgrade the diesel locomotives to electric models at a cost of Sh15 billion.

The second phase begins a month after the June 1 commissioning of the inaugural 427km Mombasa-Nairobi SGR that starts at Mombasa port through Kilifi, Kwale, Taita-Taveta, Makueni, Kajiado, Machakos and Nairobi counties.

Industrialists in East Africa have expressed optimism that transport charges, which account for 60 per cent on the cost of production, could reduce sharply, lowering retail prices for various goods produced for the local and foreign markets.

Currently, 90 per cent of Kenya’s 1.5 million containers imported annually are transported by road, which is blamed for road damage and accidents. With the SGR, Mombasa port could handle up to 22 million containers with 40 per cent being reserved for SGR once it commences operations.

Meanwhile, Uganda’s SGR plan has since secured 60 per cent of the land meant for the 273-kilometre Malaba-Kampala railway line. Three thousand people have been compensated and relocated to pave the way for SGR.

Uganda’s SGR head of public relations and corporate affairs Diana Apio said they are engaging all land owners along the identified route to implement the project with ease.

Once completed, the SGR would cut cost of transporting a unit from the Sh300,000 by 30 per cent while the weeklong journey would be reduced to a day.

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