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Grand Sh2.1trn plan to expand SGR to Kisumu, Malaba, Isiolo


Kenya has set sights on a Sh2.1 trillion plan to extend the Standard Gauge Railway (SGR) to Kisumu, Malaba and Isiolo by the end of June 2027, a government document seen by the Business Daily shows.

According to the plan, the State Department of Transport will build another 2,746 kilometres of the SGR at Sh2.1 trillion, a move that will push the total spend on the modern railway to more than Sh2.75 trillion.

The plan, lifted from the Jubilee Government's grand scheme on SGR (so far Kenya’s most expensive project), is part of the Sh3.42 trillion Lamu Port South Sudan-Ethiopia Transport (Lapsset).

Lapsset is aimed at opening up northern Kenya and revamping the northern corridor by spurring movement within Kenya, South Sudan and Ethiopia.

It is an ambitious scheme that will not only see the modern railway reach the border town of Malaba via Kisumu, as it was initially envisioned, but also Isiolo, Moyale and the island of Lamu.

The line will move from Mariakani in Mombasa County to Lamu to Isiolo. From Isiolo, the SGR will be connected to the northeastern town of Moyale which borders Ethiopia.

From Isiolo, the government will extend the SGR to Nairobi, connecting the country’s capital city and commercial hub to northern Kenya and finally to Ethiopia.

From Naivasha, the SGR is extended to Malaba through Kisumu.

The bulk of the financing for these additional kilometres of the SGR, around Sh1.8 trillion, will be from external financiers that the document has not revealed while the rest will come from the Kenyan government.

So far, the SGR from Mombasa to Naivasha has been financed by the Chinese at a total cost of Sh656.1 billion.

The longest stretch of the planned SGR, 753.2 kilometres, will be from Isiolo to Nakodok, a small town near the border between Kenya and South Sudan.

The Transport Ministry, headed by Kipchumba Murkomen, has cost this phase of the SGR at Sh443.2 billion.

From Lamu to Isiolo, a distance of 544.4 kilometres, the Ruto administration plans to build the rail line at Sh348.7 billion.

From Isiolo to Moyale, a distance of 475.9 kilometres, the country is expected to use Sh317.8 billion to build a new SGR line.

The line connecting Mariakani to Lamu of 325.3 kilometres will cost Sh257.3 billion.

There will be another line of 278 kilometres connecting Nairobi to Isiolo that will consume Sh239.2 billion.

Phase 2B of the SGR from Naivasha to the lakeside city of Kisumu will cost Sh380 billion while the last leg, 2C, from Kisumu to Malaba bordering Uganda will take another Sh122.9 billion.

The document from the State Department of Transport reveals what appears like a near-impossible feat of the government wanting to complete the entire transport circuit in four years from 2023 to 2027.

Although the ministry’s document indicates that construction of these railway lines is to begin at the start of July this year, no budgetary allocation has been made for the SGR for the next three financial years.

In 2014, the government entered into a tripartite agreement with the governments of Rwanda and Uganda to construct a standard gauge railway from Mombasa through Kampala to Kigali, Rwanda.

However, the SGR ended abruptly in Naivasha with China reportedly declining to finance the last leg of the modern railway after failing to strike an agreement with Uganda.

The new administration of President Ruto has rekindled plans to complete the SGR.

Through a partnership with the Chinese government, Mr Murkomen said earlier this year the government wanted to extend the SGR from Naivasha’s Mai Mahiu to the border of Uganda through a five-year plan that will see the multibillion-dollar railway line run through Narok, Bomet, Nyamira, Kisumu, and finally Malaba.

“In the long run, we would like to complete the connection of the SGR from Suswa to Kisumu through Bomet, Nyamira, parts of Kisii and later to Malaba. Later, we can think of upgrading the existing MGR via Nakuru to Kisumu and via Eldoret to Malaba,” the CS said in a statement on December 15 last year.

The Transport Ministry has been allocated Sh100 billion from the Railway Development Levy Fund (RDLF) for the next three years to revamp the existing SGR line from Mombasa to Naivasha via Nairobi and build new sidings.

The money will also be used to buy more locomotives and cargo wagons, which are aimed at improving the freight capacity of the modern railway which is still facing cut-throat competition from trucks.

Plans to revamp the SGR involve mostly building new Metre Gauge Railway (MGR) or rehabilitating them.

In Financial Year 2023/24, the government plans to spend Sh37.4 billion on connecting these MGR lines to the SGR and buying new locomotives and freight wagons.

The State will spend Sh11.9 billion to acquire new rolling stock within the next 12 months.

Kenya last bought its 1,620 locomotives and wagons from China in 2018.

While Kenya’s plan to extend its SGR remains largely on paper, its competitor Tanzania, is at an advanced stage of building its own, gaining a foothold in the fight for the control of East Africa’s logistics corridor.

At the start of the year, Tanzania moved to extend its SGR to neighbouring landlocked countries after it inked a Sh271 billion ($2.2 billion) deal with two Chinese contractors to construct the final section of the 2,102 km of the line.

This makes the 506km line the longest stretch of the SGR on the continent. The line is set to be completed by the end of 2026.

Hopes of China resuming the financing of the last leg of the SGR were rekindled by reports that Uganda secured funds from the Standard Chartered Bank to start constructing its modern railway.

Kampala has handed the contract to build its first SGR to a Turkish company after it failed to get the money from China.

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