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Doubts over Kenya, Uganda rail funding as China snubs meet

Part of Kenya’s standard gauge railway. Uganda is yet to start building its section of the rail. FILE PHOTO | NMG
Part of Kenya’s standard gauge railway. Uganda is yet to start building its section of the rail. FILE PHOTO | NMG  NATION MEDIA GROUP

Uncertainty hangs over plans to build a cross-border standard gauge railway (SGR) after Beijing failed to respond to a request for a joint meeting with Kenyan and Ugandan officials.

The two states had requested for a meeting in China on February 28, with Kenya’s Ministry of Foreign Affairs sending reminders mid last month, but Beijing went mute.

As a condition for funding the Kenya-Uganda SGR, Exim Bank of China requires a joint commitment from the two states that each will extend their line to the Malaba border post.

China’s delay to respond to a request for a joint meeting is likely to interfere with official timeline for the Kisumu-Malaba-Kampala SGR.

Officials from Kenya’s ministries of Finance and Works, and Uganda’s Finance minister Matia Kasaija had been scheduled to travel for a meeting on February 27, but they postponed after China failed to give them a confirmation.


“China has not responded to the request that the joint delegation of Kenya and Uganda made to them in regard to having a meeting with the Exim Bank on February 28,” said a source close to the matter.

“Exim Bank of China, which is the financier of the project for both countries, had committed to extending credit to Uganda on condition that Kenya is ready to extend its section of the railway to Malaba and this is the commitment that they were to make in Beijing,” the source added.

Mr Kasaija confirmed that they did not travel to China because they were yet to get the requisite clearances.

“It is true we did not travel. First, because we have not yet gotten confirmation from China’s Ministry of Commerce about the date of meetings, and secondly we are waiting for clearance from their Ministry of Foreign Affairs, which did not come through,” he said.

A source in the government said the two East African nations will have to wait until they get the invite. Kenya was mulling over stopping its rail in Kisumu after Rwanda indicated that it would construct its SGR via Tanzania.

If the discussions are fruitful, Uganda expects an advance of $2.8 billion (Sh288.4 billion), which is 85 per cent financing for construction of the Malaba-Kampala stretch (273km).

Each kilometre will cost $8.4 million (Sh865.2 million. Attempts to get a response from Kenya Railways managing director Atanas Maina were futile as he did not get back to the Business Daily.

Build modern port

The government has argued before that if the SGR ends in Kisumu it will still be viable as cargo will be transported over Lake Victoria to other East African countries.

Kenya has already signed a commercial contract for phase 2C, which will run through Kisumu-Yala-Mumias to Malaba.

China Road and Bridge Corporation (CRBC) is scheduled to build a modern Sh14 billion port in Kisumu, which will be useful in connecting the rest of EAC states through Lake Victoria.

A modern container port in Kisumu is likely to turn the town into a trade hub for neighbouring countries such as Tanzania, Uganda, Rwanda and Burundi.

For decades, Kisumu port registered robust business boosted by a reliable railway system and maritime vessels that ferried cargo to ports such as Mwanza and Bukoba in Tanzania and Jinja and Port Bell in Uganda.

Uganda is yet to start building its section of the SGR while Kenya’s first phase, which runs from Mombasa to Nairobi, is 98 per cent complete and is expected to be operational by June.

The first phase of Uganda’s SGR is expected to start this year and is being built by China Harbour Engineering Company. It is expected to take four years to complete.