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Railway construction will boost economy, cut costs

26 November 2013, 10:19

Nairobi - The construction of Mombasa-Malaba high speed standard gauge railway line which will kick off on Thursday will improve the economy while cutting transportation costs, according to Kenyan officials.

Director General of the Acting Vision 2030 Delivery Secretariat Wainaina Gituro on Monday said the 14 billion U. S. dollars Standard Gauge Railway (SGR) project is being implemented by the Kenya Railways Corporation.

"Kenyans from all walks of life are set to enjoy considerable cost savings in the next three to five years, once the construction of a standard gauge railway, which is one of the most important vision 2030 projects, is completed," Gituro said in a statement issued in Nairobi.

This is one of the flagship projects under the Vision 2030 national development strategy and will be part of the bigger 2,937 km railway line which will connect Kenya, Uganda and Rwanda.

The heads of state from the three East Africa countries of Kenya, Uganda and Rwanda signed an agreement in May to jointly build the railway line.

Kenya is racing to be a preferred business destination for locals and foreigners as part of its strategy to become a middle income country by 2030.

Gituro said the railway project which will be constructed by the China Road and Bridge Corporation will herald a major economic transformation based on an expected slashing of commodity prices.

The new SGR line will typically present an opportunity for the railway operator to run freight trains with 54 double stack flat wagons carrying 216 TEUs per trip.

"We are glad that this project is now taking off as it provides the country with enormous economic development benefits once completed in the next five years," Gituro said.

Kenya already has a railway line, the Kenya-Uganda Railway running from Mombasa to the Ugandan city of Jinja. But years of neglect and under investment have made the railway to be inefficient, according to Kenya Association of Manufacturers.

The railway line serves Kenya, Uganda, Rwanda, Burundi and the eastern region of the Democratic Republic of Congo ferrying their imports that come through the Port of Mombasa.

The railway is now managed under a 25-year concession by the Rift Valley Railways. Cabinet Secretary for Transport and Infrastructure Michael Kamau complained recently that the concession has not helped to improve the efficiency of the railway line.

Gituro noted that basic commodity prices have remained high due to the high road transportation costs between Mombasa and Nairobi among other major towns.

Such prices, he said, are however, expected to drastically drop by 2017 when the new line is commissioned.

He said the government has already lined up funding for the project with a 256 million dollars allocation in the current national budget.

More budget resources will be raised through the railway development fund levy and a 3.3 billion dollars loan from the EXIM Bank of China covering more than 85 percent of the total project costs.

Gituro confirmed that Kenya Railways had completed the project feasibility studies and preliminary designs. In addition, Kenya Railways has also signed two commercial contracts for the delivery of the civil works (2.6 billion dollars) and supply, installation/ commissioning of facilities, locomotives and rolling stock (1.15 billion dollars).

Transport and Infrastructure Cabinet Secretary Engineer Michael Kamau last week said the Chinese company which has rich experience in railway construction was awarded the tender.

"The project is strategic and an enabler to the country's economic growth as envisioned in the country's long term projects, " Kamau told a parliamentary committee.

The East African nation will be taking the lead to confirm its commitment to operationalize the "tripartite agreement" signed by the governments of Kenya, Uganda and Rwanda in Mombasa in August ahead of a ground breaking session which will also be presided over by President Uhuru Kenyatta.

The tripartite agreement committed the three states to explore avenues to build a standard gauge railway connecting Mombasa to Kampala and on to Kigali.

In recent days, Burundi and South Sudan have also expressed their interest in the project.

- Xinhua


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