Beginning January 2020, import cargo destined for Uganda, Rwanda, South Sudan and DRC through Mombasa port will be offloaded at the Mai Mahiu Standard Gauge Railway station for onward transmission.
Kenya Railways acting managing director Phillip Mainga in a Thursday told The EastAfrican that a $65.7 million inland container depot will be built at Mai Mahiu in the next three months, marking a potentially major coup for Kenya’s ambition of becoming the transport corridor of choice for neighbouring countries.
President Uhuru Kenyatta this week commissioned Phase 2A of the SGR, but the lack of an ICD means only a passenger train will ply the route until December.
“Our priority now is the ICD which we hope to complete in three months. The contractor is already on the ground,” said Mr Mainga.
The government has allocated Ksh6.9 billion ($65.7 million) for construction of the ICD and related facilities to enable seamless transportation of cargo destined for neighbouring countries, including parts of the Democratic Republic of Congo.
Viability of the multibillion dollar SGR has been doubtful after Kenya failed to secure funding for extension of the service to Malaba, which would have locked in lucrative transport contracts to neighbouring countries.
The passenger service line from Nairobi to Suswa is targeting ordinary commuters as well as tourists connecting between Mombasa and the Masai Mara game reserve.
In Suswa, KR intends to build freight handling facilities specifically targeting to transport cargo including wheat, maize, tea and animals destined for other parts of the country and for export.
The SGR freight service generated of Ksh5.7 billion ($54.3 million) last year, while the passenger service generated Ksh1.6 billion ($15.2 million).
The entire SGR has so far cost nearly Ksh500 billion ($5 billion) in Chinese loans that are due for payment beginning January.
An estimated 30 per cent of all cargo coming through Mombasa Port is designed for neighbouring countries.
Kenya Ports Authority data shows 22.8 million tonnes of cargo was handled in the eight months to August, compared with 20.7 million tonnes same period last year.
Trans-shipment cargo increased by more than 132 per cent from 698,705 tonnes last year to 1.6 million tonnes.
Kenya Railways has opted to prioritise the construction of a 7km road connecting the ICD to the Mai Mahiu-Narok road to facilitate cargo transportation via road.
For rail cargo, they are setting up a trans-shipment hub at Longonot to be used to load cargo on the old meter gauge railway (MGR) for shipment to neighbouring countries.
This means traders opting to use the railway will transport cargo through the Mai Mahiu—Narok road to Longonot, a 35 kilometres distance, and load onto the MGR.
The government has put on hold plans for a railway link connecting the SGR to the MGR in Naivasha, a 43-kilometer stretch expected to cost Ksh6 billion ($60 million).
This effectively puts the upgrading of the MGR from Naivaisha to the border town of Malaba at a cost of Ksh15 billion ($150 million) on ice, which could also slow down Uganda’s plan to upgrade its Malaba-Kampala MGR.
Uganda announced plans to invest $205 million in rehabilitating the old line, which it was hoping to connect with the Kenyan line to enhance faster cargo transportation.
Despite terminating at Suswa, President Uhuru said that Kenya has not abandoned ambitions to extend the SGR to Kisumu even after China pulled the plug on the Ksh380 ($3.6 billion) funding last year.
“Just like we completed the Mombasa-Nairobi section, we will also ensure this project gets to its destination. There will be challenges along the way but that does not mean we will not do it,” he said.
In the wider scheme of things, the Kenyan SGR was designed to terminate in Malaba where it was supposed to link with Uganda’s SGR.
Uncertainties now engulf the projects with Uganda also failing to secure financing from China for its 273-kilometer section from Malaba to Kampala.
According to Mr Mainga, the SGR freight service will take 10 hours from Mombasa to Suswa and will target to transport two million tonnes of cargo annually.
The SGR is currently transporting six million tonnes of cargo from Mombasa to Nairobi using 14 daily trains. Cargo transported by SGR account for 37 per cent of all goods entering the Mombasa Port.
“We will start with two freight trains on the Nairobi-Naivasha line and increase the trains depending on demand,” he noted.
He added the line will significantly reduce the number of trucks on the busy Kamandura—Mai Mahiu—Narok road and cut the number of hours it takes to transport cargo via road from Mombasa to Kampala from 36 to 24.
The push to haul more cargo through the SGR is bound to intensify confrontations with transporters who reckon the SGR is killing private businesses, particularly trucking and container freight stations in Mombasa.
“It’s unacceptable to kill one sector of the economy in the name of building another one,” said Kennedy Karisa, the Truckers Association of Kenya secretary general.