Petrol products dealer, Vivo Energy has signed a partnership pact with Kenya Railway that will see it use the Nairobi-Nanyuki railway line to transport its products.
The move grants the refurbished line an economic lifeline that will benefit Central and Northern communities.
The move is expected to reduce congestion and accidents on the Nairobi-Nyeri highway.
Speaking after the 240km test-run from Nairobi to Nanyuki’s Vivo Fuel depot, petroleum principal secretary Andrew Kamau said Vivo Energy Kenya is the railways’ anchor tenant for fuel transportation from Nairobi to their Nanyuki hub.
“The Sh1.8 billion used to support rehabilitation of the Nairobi-Nanyuki metre gauge railway was part of KPC’s remittances to the exchequer in form of special dividends,” said the PS.
Transport principal secretary Solomon Kitungu added that farming and pastoralist communities will benefit from cheap transport services thereby enhancing market access for local produce.
“With this line, I see Nanyuki becoming a natural logistics hub for 10 counties in this region as well as enjoy increased local tourism,” said governor Ndiritu Muriithi.
Kenya Railways managing director Philip Mainga said they expect to generate about Sh370.4 million revenue per year from the revived line with more contracts set for signing between the corporation and private businesses for cargo transportation. Vivo Energy said it will ferry 15 million litres of fuel monthly from Nairobi to their depot worth in Nanyuki via the railway line where a tonne will be charged Sh1,640 for a tone or Sh82,000 each 50-tonne of fuel tank.
“Ferrying fuel via the railway will bridge the supply gap as only five million litres storage capacity was being utilised. Our Nanyuki depot has a 12 million capacity,”said Vivo’s stakeholder and government relations manager Genesio Mugo.
Mr Mugo said Vivo plans to move upto five million litres of fuel per month with the numbers expected to rise to 15 million litres of fuel per month as demand grows from the neighboring counties.
About 300 tankers affected by the rail transport service will handle last mile services delivering fuel to petrol stations, government installations and well as private entity yards.