Idle Sh25 billion Naivasha line to delay SGR’s benefits

More than 20 kilometres of the recently launched Nairobi-Naivasha standard gauge railway (SGR) will remain unused, raising further questions about the immediate benefits of the mega project to Kenyan taxpayers.

Passengers will only use 100 kilometres of the railway line from Nairobi to Suswa out of the 120 kilometres that Kenya built using a Sh150 billion Chinese loan.

This means that taxpayers are unlikely to get immediate benefits from the remaining 20 kilometres, which would become useful if the SGR were extended to Kisumu and later to the Ugandan border.

The Nairobi-Naivasha SGR line, opened to passenger services last Wednesday, cost an average of Sh1.25 billion a kilometre owing to the terrain, theoretically putting the cost of the idle line at about Sh25 billion.

The idle line has several bridges, but does not have a station and ends in a remote village off Duka Moja —which makes it difficult for it to be used for passenger services.

Sources at the Transport ministry reckon that contracts and design for the Nairobi-Naivasha line were inked with the extension to Kisumu as part of the bigger plan for a seamless SGR track from the port of Mombasa to Uganda.

Transport Secretary James Macharia failed to respond to the Business Daily’s questions on the idle 20 kilometre SGR line.

Kenya went slow on its bid to extend the SGR to Kisumu and later on to the Ugandan border after failing to secure a multi-billion-shilling loan from China, which funded the first and second phases of the new railway line.

The Sh320 billion SGR line linking the Mombasa port with Nairobi was opened in May 2017, which was later linked to the Sh150 billion line to Naivasha.

Kenya had planned to open an industrial park in Naivasha, offering companies tax breaks for investing in manufacturing, and preferential tariffs for electricity generated in the nearby geothermal fields. But that has been delayed.

It will build a dry port on a 1,000-acre piece of land just before the Suswa SGR station for cargo headed to Western Kenya and the neighbouring countries from the Mombasa port, further dimming the immediate use of the idle 20 kilometre track.

“This is going to be the final stop for the cargo from Mombasa port as they head to the other parts of the country and we have also given our neighbouring countries some space to set up their cargo handling yards, “ President Uhuru Kenyatta said last week in reference to the cargo handling station—which is about seven kilometres to Suswa.

Old metre gauge

This looks set to stoke further confusion over plans to upgrade the old metre gauge railway (MGR) track from Malaba to Naivasha and link it to the SGR line.

The government had earlier announced plans to revamp the Malaba line with Sh21 billion funding from an unidentified private backer rather than building another modern one with Chinese money.

Sources familiar with the plan reckon that quotation for the project from a Chinese contractor surpassed the State budget by more than three times, sending the government back to the drawing board.

The delay in revamping the new line and construction of the dry port is behind the exclusion of the cargo business in last week’s launch of the Nairobi-Naivasha SGR line, which will only handle the passenger business.

The government is yet to issue dates for start of the cargo freight on the line-- which is critical in ensuring the new line generates revenues to pay the Chinese operator and China loans used for its construction.

Critics have questioned the viability of the Nairobi-Naivasha line without the cargo business and staggered passenger services.

Passenger services from Syokimau to Suswa will operate on Fridays and Sundays while the Syokimau to Ngong service will run from Monday to Friday amid concerns it could costly when compared to road trips.

Residents of Rongai will pay Sh100 to Syokimau before taking another train at Sh50 to the city centre, according to the schedule released by Kenya Railways.

It costs on average Sh100 to take a matatu ride from Rongai, although it may take longer due to heavy traffic on the Magadi Road.

Depending on where one lives in Rongai, there may be additional costs to access the station, located about four kilometres from the town in Kajiado County.

Mr Kenyatta has rejected criticism of SGR plans, likening suggestions that the new railway was heading to “nowhere” to criticism of the original Uganda-Kenya railway by politicians during the British colonial era, who called it the “lunatic express”.

“Those who think they will take us backwards, they should leave Kenya and look for another country,” Mr Kenyatta said as he opened the new railway line.

Many importers say the new Mombasa to Nairobi railway is too expensive to move freight and have been angered by government attempts to force them to use it.

It costs about Sh80, 000 to truck a container from Mombasa to Nairobi, but Sh100, 000 by rail, mainly due to extra costs for moving goods from the rail terminus to an inland depot.

Official data showed that SGR generated sales of Sh5.7 billion last year on the back of the cargo business.

The passenger business generated sales of Sh1.61 billion, underlining the power of cargo business in driving sales.