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Funding for Kisumu SGR ready, CS says

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Completion of Phase 2B of the standard gauge railway — from Naivasha to Kisumu — is still on course despite the government rehabilitating the metre gauge line, Transport Cabinet Secretary James Macharia has said.

Speaking to the Nation Tuesday on the sidelines of the Forum for China Africa Cooperation (Focac) in Beijing, Mr Macharia said that since the SGR is a regional project, Kenya is aligning it with what its neighbour Uganda is doing.

He said that the time for completing the whole project might have changed but plans to extend it to Malaba have not, adding that China was in the final stages of realising funds.

“Kenya is the entry gate of the SGR, which runs from Lamu-Mombasa-Naivasha-Kisumu-Lake Victoria all the way to the Atlantic Ocean in West Africa. However, Kenya cannot develop it on its own because it will not be viable due to the fact that 30 percent of cargo from Mombasa is on transit, of which 85 percent goes to Uganda. There is need to harmonise the SGR with what countries in the region are doing,” said Mr Macharia.

“On the future of the SGR and its status, Kenyans need to know that Phase 2A is 98 percent complete and will be operationalised in September. Eventually, the SGR will reach Kisumu and finally Malaba, only timing has changed,” he said.

He downplayed fears that upgrading of the old railway could see an end to the SGR, arguing that the venture is an intervention as the country awaits funding from Beijing.

“Since by September we will start receiving goods at Naivasha from Mombasa and Naivasha-Kisumu is not yet ready — even if we start today it will take three to four years — we had to rehabilitate the old railway to Malaba so that while it will take nine hours for goods to arrive in Naivasha, it should take the same time for the goods to reach Uganda, which is our biggest client. Without modernising it, it might take two days,” said the CS.

Meanwhile, Uganda has invested $205 million (Sh20.7 billion) in restoring the old railway line linking Kampala to Malaba.

Mr Macharia said that he met the Chinese Minister for Commerce, Exim Bank officials, Uganda President Yoweri Museveni and his Transport minister on Tuesday to conclude talks on securing funds for the project.

“In fact the funds had been approved by the Chinese Ministry of Commerce and are now with Exim Bank, which is looking into financial dynamics of lending according to the structure of each country,” Mr Macharia told the Nation.

He added: “SGR was conceptualised by heads of four countries; that is Kenya, Uganda, Rwanda and South Sudan and they signed a document called SGR Protocol, which contains commitments that require every country to complete its bit. However, Kenya is going on with completing its part and at no point did China give ultimatums that this country needs to do this and that to get funding.”

Mr Macharia dismissed claims that Kenya signed a secret agreement with China allowing a mystery company with unknown local shareholders to run the SGR.

He said that Africa Star Railway Operation Company Ltd, owned by China Road and Bridge Corporation (CRBC), will manage operations for 10 years.

“Let it be known that Africa Star Railway Operation Company Ltd is 100 percent a subsidiary of CRBC. In our registry it is the one operating the SGR, it has no local shareholders as reported by the media. We have only one signed contract and there is no way a contract could be signed freeing the operator from maintenance.’’

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