Kenya: Govt Halts Plan to Extend SGR to Kisumu Over Funding Hitch

A standard gauge railway cargo train departs from Mombasa port on May 30, 2019.

Nairobi — The government has put on hold the extension of the Standard Gauge Railway (SGR) to Kisumu, opting instead to reactivate the Metre Gauge Railway (MGR) line linking Naivasha to the lakeside city.

Transport Cabinet Secretary James Macharia told the State broadcaster KBC, at the end of a three-day visit by President Uhuru Kenyatta to China, that the ministry will model Naivasha, as a trans-shipment centre from where cargo arriving on the SGR from Mombasa will be transferred to the existing metre gauge rail to Malaba for further hauling to neighboring Uganda.

"What we've prioritized is making sure that when goods get to Naivasha, they're not marooned. What is important is to make sure we have connectivity by ensuring that we have a transshipment point in Naivasha from SGR to MGR," Macharia who is part of Kenyatta's three-minister delegation said on Friday.

He said the move will save on time and ensure seamless transportation of cargo from the port of Mombasa to Kampala.

"What is urgent right now is the connectivity in Naivasha because we've the MGR going all the way to Malaba and Kampala. We want to make the MGR line more viable by connecting it to SGR," the CS pointed out.

Macharia's remarks followed revelations that the government had not secured a much touted Sh368 billion loan from China for the extension of the SGR from Naivasha to Kisumu. China instead provided some Sh40 billion for the MGR.

Orange Democratic Movement leader Raila Odinga who accompanied Kenyatta to China had singled out the inking of the financing deal as the main agenda of the visit to Beijing saying the extension of the modern rail to Kisumu would commence next year.

"We're going to China with President Kenyatta to negotiate SGR construction deals so that next year the railway can continue from Naivasha, Narok, Nyamira, Sondu, and finally to the Lakeport in Kisumu," the African Union Special Envoy for Infrastructure told a public gathering ahead of the trip to China.

Initially, the government is understood to have proposed the splitting of the cost for the 270 km line into a loan and a grant.

China Global Television Network in September last year quoted a source within the presidency as saying President Kenyatta had requested his Chinese counterpart, Xi Jinping, to provide fifty per cent of the $3.8 billion required for the project as grant citing the regional significance of the SGR extension to Kisumu which is expected to be linked to a Ugandan line through Malaba.

Kenya is currently completing the second phase of a 120 km SGR line linking the capital, Nairobi, to Naivasha at the cost of Sh150 billion.

The line connecting the port city of Mombasa to Nairobi has been operational since May 31, 2017.

The 485-kilometer Mombasa-Nairobi link was completed at the cost of Sh327 billion.

The completion of the SGR extension to Kisumu and the finally to the border in Malaba is seen as crucial to Kampala's efforts to secure funding for a similar infrastructure will connect the capital to Tororo, Gugu, Mpondwe, Bihanga, and Mirama.

Ugandan Finance Minister Matia Kasaija had earlier in the year indicated that the country was still in talks with the Export-Import Bank of China as the government announced a compensation program for citizens affected as the process of acquiring land for the project kicked off.

Yoweri Museveni's government received a €21.5 million funding from the European Union in 2018 to repair an aging 375 km metre-gauge railway line between Tororo and Gulu, casting doubt on Uganda's commitment to the SGR project.

During his March visit to Kenya, Museveni seemingly endorsed the project taking a ride from Mombasa to Nairobi at the end of his State Visit to the country.

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