Kenya Unveils Grand $20 Billion Rail Expansion Plan to Bolster Regional Connectivity

by | May 16, 2023 | Business, News | 0 comments

In an ambitious plan estimated at $20 billion, Kenya has committed to extending the Standard Gauge Railway (SGR), a modern railway system, to key regional hubs including Kisumu, Malaba, and Isiolo by the end of June 2027, according to a government document acquired by The New York Times.

The latest proposal from the State Department of Transport envisions the construction of an additional 2,746 kilometers of the SGR, pushing the total investment in this transformative rail project over $25.8 billion. The project, an integral part of the broader $32 billion Lamu Port South Sudan-Ethiopia Transport (LAPSSET) initiative, is set to revolutionize transportation infrastructure in the region.

LAPSSET, a key component of the Jubilee Government’s grand vision for SGR, aims to stimulate economic activity in northern Kenya and overhaul the northern corridor by enhancing connectivity within Kenya, South Sudan, and Ethiopia. This ambitious plan seeks to extend the modern railway beyond its initial projected terminus of Malaba, to reach Isiolo, Moyale, and the island of Lamu.

The proposed rail network will stretch from Mariakani in Mombasa County through Lamu to Isiolo, and then extend to the northeastern town of Moyale, located on the Ethiopian border. From Isiolo, the rail will be extended to Nairobi, the country’s capital and commercial hub, fostering connection between northern Kenya, the capital, and Ethiopia.

The majority of the funding for this extensive railway expansion, around $16.9 billion, is anticipated to come from undisclosed external financiers, with the Kenyan government providing the remaining funds. The existing SGR from Mombasa to Naivasha was financed by China, costing a total of $6.15 billion.

The Transport Ministry, under the leadership of Kipchumba Murkomen, has outlined costs for various stretches of the expanded railway. The longest segment, a 753.2 kilometer stretch from Isiolo to Nakodok near the South Sudanese border, is projected to cost $4.15 billion.

Under the Ruto administration, Kenya’s plan to extend its SGR is back on track. Earlier this year, in a partnership with the Chinese government, Murkomen announced a five-year plan to extend the SGR from Naivasha’s Mai Mahiu to the Ugandan border, running through Narok, Bomet, Nyamira, Kisumu, and finally Malaba.

The Transport Ministry has secured a $937 million allocation from the Railway Development Levy Fund (RDLF) for the next three years to improve the existing SGR line from Mombasa to Naivasha via Nairobi and construct new sidings. These funds will also facilitate the purchase of additional locomotives and cargo wagons, enhancing the freight capacity of the railway.

Despite the grand plans, no budgetary allocation has been made for the SGR for the next three financial years. Yet, the ministry’s document shows an ambitious goal of completing this vast transport circuit in four years, from 2023 to 2027.

While Kenya’s plan remains largely theoretical, neighboring Tanzania has made significant strides in establishing its own SGR, securing a competitive edge in the battle for control over East Africa’s logistics corridor. Tanzania recently inked a $2.2 billion deal with two Chinese contractors to construct the final section of its 2,102-kilometer line, set to be completed by the end of 2026.

As Kenya unveils its grand rail expansion plan, hopes of China resuming financing for the final leg of the SGR have been rekindled by reports

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