Kenya has opted to upgrade the old railway track from Nakuru to Kisumu at cost of Sh3.8 billion and evacuate cargo and passengers to neighbouring countries via Lake Victoria, dimming hopes of connecting the standard gauge railway (SGR) line to Uganda.
Transport Secretary James Macharia said Wednesday that refurbishment of the century-old rail network would start in coming months, marking a U-turn since the State had ruled out reviving the line that had fallen into disrepair.
The line will connect to the recently refurbished Sh3 billion Kisumu port, which will ferry cargo to Uganda, Rwanda, Burundi and Democratic Republic of Congo on ships via Lake Victoria.
This marks a change of earlier plans to upgrade the old metre gauge railway (MGR) line between Malaba border and Naivasha where the multi-billion shilling SGR line from Mombasa ends.
Kenya dropped 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.
Mr Macharia said that the Kisumu line, which had a thriving passenger service in the 1990s, will form the major supply route to deliver cargo to the neighbouring countries through the Kisumu port.
"We have just completed a technical assessment of the line and we need about Sh3.8 billion to make it workable though not at a high speed," Mr Macharia said in an interview with the Business Daily.
"This will be useful in supplying cargo to the port, which we have completed reviving. It is an interim solution as we plan for the extension of SGR," he added.
Plans to upgrade the old Kisumu line emerged in a week when Uganda also announced that would start refurbishing the old rail network this month to boost bulk cargo transportation, after failing to secure $2.2 billion in Chinese funding for a new SGR line.
The rehabilitation will be carried out in phases over several years and cost at least $267 million, said the state-run Uganda Railways Corporation, adding that the European Union and other international lenders would back the upgrade.
Mr Macharia said Kenya will fund the upgrade of the Kisumu line from internal resources, cutting reliance on Chinese loans for railway projects.
The Treasury on Tuesday sought parliamentary approval to increase the budget for the year starting July by Sh86 billion to Sh3.13 trillion to accommodate projects not planned earlier.
Rail transport has been allocated an additional Sh12.2 billion, which sources at the Treasury say includes the Kisumu line upgrade expenses.
In many places on the Nakuru--Kisumu old railway line, grass has grown over disused or missing tracks.
"The reality is that the Nakuru-Kisumu is not in good shape, it has 17 bridges which have been vandalised so it may require doing a new line altogether," Mr Macharia said earlier in the year.
The old line from Naivasha to Malaba has been operational but is in bad condition, limiting the cargo volumes and train speeds on it.
The Kisumu track from Nakuru, which goes through Njoro, Londiani, Muhoroni and terminates at Butere, has not been in use.
A cargo rail business is critical in making the Kisumu port a viable investment, and this informed the decision to upgrade the old Nakuru--Kisumu rail network.
President Uhuru Kenyatta is in coming days expected to launch the Kisumu Port, which is expected to raise the fortunes of the Western Kenya city as a regional economic hub.
The port will make Lake Victoria a crucial transport corridor in the shipment of general cargo into and out of the East African region.
Some of the goods that Kenya plans to export via the port include fertiliser, cement, rice, edible oil and general dry cargo such as spare parts and goods coming from the Port of Mombasa via SGR.
The upgrade of the old track from Naivasha to Malaba ran into headwinds after its costs surpassed the government’s budget, shattering plans to link the line to the SGR at Naivasha.
The Nairobi-Naivasha SGR line was opened last month. The government had estimated that revamping the MGR line to Malaba would cost Sh21 billion.
The funding was to come from an unidentified private backer, an option seen as cheaper compared to building a new modern line with Chinese loans.
The private investor was expected to recover the investments from higher freight fees on cargo and passenger fares.
However, the quotation for the upgrade project done by a Chinese contractor surpassed the envisaged budget by more than three times, sending the government back to the drawing board.