12 June 2014

Kenya: RVR Now Working, Let's Postpone SGR


VIVO Energy has just announced a partnership with Rift Valley Railways to transport diesel fuel from Mombasa to Nairobi.

Vivo, which runs Shell petrol stations, plans to transport the equivalent of 200 truckloads of diesel, or six million litres of fuel, every month from Mombasa to Nairobi.

Undoubtedly Vivo will soon start sending fuel by rail to Uganda.

Last month RVR confirmed another deal with Roofings Ltd, Uganda's largest steel manufacturer. RVR will carry 40,000 tonnes of steel annually, equivalent to 2,000 truckloads, from Mombasa to Kampala.

A single train carries the load of 50 trucks. These deals will take a lot of pressure off the Mombasa highway.

RVR is starting to take off. But this raises the question of whether now is the right time for Standard Gauge Railway.

The SGR project will cost over Sh300 billion just from Mombasa to Nairobi. A World Bank analysis in August 2013 stated that "there is no economic or financial case for standard gauge at this time."

Government is having trouble balancing its books. It may be heresy but let's postpone the SGR project until RVR is reaching full capacity and we can afford to pay for an additional railway.

Quote of the day: "In spite of everything I still believe that people are really good at heart." - Dutch writer Anne Frank was born on June 12, 1929.

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