A $3.75 billion loan (Sh328.1 billion) from China has boosted plans for construction of the standard gauge railway which the government hopes to complete by 2018.
Transport and Infrastructure Cabinet Secretary Michael Kamau has said $2.5 billion out of this amount will be exclusively for the standard gauge railway construction while $1.25 billion will be for rolling stock which include trains and wagons. The loan is expected to be repaid over a period not exceeding 40 years with exclusion of the 10 year grace period.
The proposed line that will increase speed trains speeds will run from Mombasa to Nairobi with a planned extension to Malaba and Kampala.
"We really have to up our game because we are at the starting point in Mombasa," Kamau said yesterday after a meeting with Kenya Railways management.
Apart from the line, the project will also include the construction of 37 crossing stations.
Furthermore, Principal Secretary Nduva Muli said the government expects to net an estimated Sh22 billion from the 1.5 per cent levy charged on imported goods to raise funds for the construction of the standard gauge railway.
The government said the railways line to be constructed will be 60 per cent cheaper to use compared to road transport.
Cargo lifted from Mombasa port is increasing at an average rate of 10 per cent annually. Last year the cargo handled was 22 million tonnes meaning that by 2017 this number will have hit about 30 million tonnes.
For the Nairobi commuter rail project, Kamau said the Makadara station will be ready for use from September 15. The station and the Imara Daima station were to be ready by mid and end 2013 respectively but have been hit by delays for various reasons.
Acting Kenya Railways CEO Alfred Matheka said the delays were partly due to removal of some old lines and delays in arrival of imported material for project construction.
Matheka however said the corporation will strive to meet the 2018 deadline for the standard gauge railway between Mombasa and Nairobi by working on five sections simultaneously to speed up the work.
Kamau, on his part, said the government will in future consider a public private partnership where it just sets up the infrastructure, in this case the rail lines and investors purchase the rolling stock used on these lines to ease the financial burden of these projects on public funds.