Kenya inaugurates Standard Gauge Railway
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Kenya inaugurates Standard Gauge Railway

Kenya is on course to complete a new Chinese-funded 472km standard-gauge railway line linking Mombasa with Nairobi in the second half of 2017. Shem Oirere reports from Nairobi on progress so far and assesses the project’s prospects for success.

THE 12-hour train journey from Kenya’s capital Nairobi to the port city of Mombasa, 483km away, has taken on a different feel in recent months. Construction crews are hard at work to complete a new standard-gauge line which runs alongside the colonial-era metre-gauge railway and is promising to reduce the same journey by eight hours from June 2017.

 

The new 472km line is a sight and development to behold. The Chinese-funded link is the largest single infrastructure project since Kenya gained its independence in 1963, and features eight underpasses where it crosses the world-famous Tsavo National Park. It also has 98 bridges, including two large structures at points where it traverses the existing line, which is part of a 1918km network linking Kenya with Uganda operated by concessionaire Rift Valley Railways (RVR) since 2005.

 

Kenya Railways Corporation (KRC) managing director Mr Atanas Maina said on April 28 that work on the $US 3.8bn project is now 75% complete. Specifically the engineering, procurement and construction management contractor, China Road and Bridge Corporation (CRBC) has completed 75% of the civil works which constitute 92% of earthworks, 81% of concrete works, 30% of stations and nearly 30% of track laying.

Maina says of the 472.3km line, 442.6km runs at grade and the total bridge length is 29.7km. “There are 33 stations along the line, of which two will be traffic hubs at both ends and eight will be intermediate stations while 23 will be passing stations,” Maina told IRJ.

The line has been designed with an axleload of 25 tonnes and could move 22 million tonnes/year at a speed of 80-100km/h for freight trains and 120km/h for passenger trains. Each of the freight trains will have a haulage capacity of 4000 tonnes, or 216 TEUs, and accommodate double-stack containers.

However, electrification of the line, which was initially incorporated into the design, will have to wait a little longer because of the lack of an adequate and reliable electricity transmission platform. The government is planning to construct new coal and nuclear power stations with a network of transmission lines that will facilitate railway electrification.

The new line also runs parallel to the Mombasa – Nairobi highway which is laden with truck traffic. According to the director general of Kenya’s National Bureau of Statistics Mr Zachary Mwangi the port of Mombasa’s freight throughput was up by 11.5% from 22.3 million tonnes in 2013 to 24.9 million tonnes in 2014. The container volumes at the port also increased by 13.2% to one million TEUs in 2014 up from 894,000 TEUs in 2013.

“The rise in TEUs was partly because of the improvement of the facilities at the port and the improvement of the single window platform that allows online transactions for international trade, thereby maximising port efficiency,” Mwangi says.

Mwangi also points out that RVR’s freight traffic is improving despite a sharp drop in passenger traffic in recent years, and it is this growth on which state-owned KRC is pegging its projections for the new line under the expectation that this momentum will continue.

Indeed with the World Bank projecting Kenya’s economy to have grown by 6% last year compared with forecasts of 4.5%, demand is increasing for modern infrastructure to support the country’s steadily expanding GDP.

Loans

Financing for the new line is provided by the Exim Bank of China which agreed to support 90%, or $US 3.42bn, of the project’s costs. The overall loan consists of a $US 1.6bn concessional loan payable over 20 years and a commercial loan of $US 1.82bn payable over 15 years. Both loans have been guaranteed by Kenya’s National Treasury. Yet achieving sufficient traffic volumes on the standard-gauge line to meet the cost of operations and repayment of the loan at this stage is far from assured

As a result the project is not without sceptics. President of the Kenya-based AB International Enterprise, Dr Anil Bhandari, who is also a former World Bank senior infrastructure advisor for the Africa Region, told IRJ in Nairobi it is not definite how KRC will ensure that required rail freight traffic uses the new line when RVR is competing in the same market.

“In my view, there is no adequate freight that can be moved by both the standard-gauge link and the metre-gauge line operated by RVR,” Bhandari says. “Passenger numbers are so low currently and with proper rehabilitation of the metre-gauge by RVR, the freight volumes could easily be increased to about 15 million tonnes, which could have been easily done without a new standard-gauge line.”

However, KRC’s chief of technical services Mr Solomon Ouna told an infrastructure conference in Nairobi recently the standard-gauge feasibility study indicated that the revenue stream “would cover the cost of operation and maintenance as well as external loan obligations and post good surplus for capital projects.”

“The existing metre-gauge railway has serious challenges in capacity provision due to obsolescence and unresponsiveness to any meaningful upgrade efforts,” he said. “Kenya’s railway problems are difficult to solve using the same narrow gauge technology which create the present railway problems.”

KRC is expected to own the standard-gauge infrastructure but appoint an operator for the line, which is acceptable to China Exim Bank in accordance with the government’s financing agreement with China. The financing deal also requires the Kenyan government to meet any revenue shortfalls when the line becomes operational after June 2017 and also to modernise and expand the existing inland container terminal at Embakasi on the outskirts of Nairobi to handle containers using the new railway.

Bhandari proposes that KRC should go a step further by appointing two contractors – one for operations and the other for maintenance with the corporation owning the infrastructure.

“KRC should also consider an open-access model for the standard-gauge line where companies with their own trains can use the line at specified times and pay the corporation an access fee,” Bhandari says.

Despite the uncertainties with the freight and passenger projections, and doubts over future competition between the two lines, Maina is also optimistic that both lines will carry sufficient volumes. “The growth of freight handled by the port of Mombasa is increasing and there will be sufficient volumes for both the standard-gauge and the existing metre-gauge railway,” he says.

While the hope is that once operational the line will provide the foundation for further economic growth in Kenya and east Africa, the first phase of the project has already provided additional jobs. Maina says the project has provided nearly 19,000 local people with direct employment and about 6000 indirectly. “More than 250 local suppliers have been directly engaged with supplying materials and subcontracting services to the project,” he says.

Some of the local sub-contractors’ input on the project include drainage works, slope protection works and grassing, as well as supply of materials such as sand, cement, fuel and steel. Local car hire and logistics service providers have also been sub-contracted by CRBC. However, according to Ouna, mobilising enough large local contractors to partner with CRBC to realise the 40% local content target for the project is a major challenge.

In addition to the main civil works, the Chinese contractor will also construct four freight terminals, build a traffic control centre for the entire line in Nairobi, and supply and install utilities and signalling and information technology facilities at the 33 stations. CRBC will also organise the supply and commissioning of 56 locomotives and 40 passenger coaches. The number of freight wagons has yet to be decided.

Maina added that the new line’s uniform specification “will permit seamless operation across borders.” Indeed the new Kenyan line is part of the larger Mombasa – Malaba – Kampala – Kigali – Juba rail network and the governments of Kenya, Uganda, Rwanda and South Sudan have signed a protocol on its implementation under which each of the countries is expected to construct its respective section.

Uganda has already awarded China Harbour Engineering Company a $US 3.3bn contract for the 237km section from Malaba to Kampala and construction is tentatively scheduled to begin in July with financial support for the project from China’s Export Import Bank. This section will eventually link with Kenya’s Nairobi – Malaba/Kisumu extension. The first component of this phase is the 120km line from Nairobi to Naivasha to serve a proposed industrial park next to Africa’s largest geothermal fields in Kenya’s Rift Valley.

Challenging

The extension crosses rugged terrain and is the most challenging of the project. It will require 28km of bridges and 8.5km of tunnels, including one which will be 5.3km long and 70m deep and is expected to take five years to drill. The route also has high embankments and the cuttings will require slope protection according to its design details. It will also span existing infrastructure such as roads and the metre-gauge line. This section will cost $US 1.5bn, or $US 12.5m per km compared with $US 8m per km for the 472km stretch between Mombasa and Nairobi. Kenya has signed a commercial contract with China Communications Construction Company for the project and work is expected to commence in September.

Beyond this the feasibility study and preliminary design for part two of the second phase of the project from Naivasha to Malaba/Kisumu have been completed and are now being evaluated for approval by the government. However, realisation of this part of the project is expected to take longer because of what Ouna describes as “development complexity and financing challenges.”

Topographical challenges have similarly been a major issue with the construction of the Mombasa – Nairobi section, including land reclamation at the Mombasa terminus.

Land acquisition, which is the responsibility of the National Lands Commission, another government agency, is another major challenge, proving a tedious and long process which has held the project back.

“Kenya’s land policy on infrastructure development is ill defined and often leads to litigation,” Ouna says. He estimated that more than $US 139m was needed to pay for land acquisition for the Mombasa – Nairobi phase and that the National Lands Commission has had to deal with a “multiplicity of stakeholders including peasants, fishermen, county governments and people’s representatives.”

“Our legal process encourages litigation aimed at stopping any form of infrastructure development,” he says.

Metre gauge

Development of the standard-gauge project comes as RVR is investing $US 305m to rehabilitate the Mombasa – Nairobi – Malaba – Kampala railway and improve rolling stock, with funds coming from loans ($US 164m), equity ($US 100m) and company cash flow ($US 41m).

“In the first five years of the concession, RVR set out to remove infrastructure bottlenecks, resolve priority track rehabilitation issues and continue with maintenance capital expenditure,” says Mr Sammy Gachuhi, chief marketing and commercial officer at RVR.

Gachui says RVR is addressing efficiency on the metre-gauge line by overhauling information technology, signalling, operations and locomotive systems “to achieve modernised operations.” He adds that the concessionaire’s strategy is to “maintain the existing client base and grow freight volumes by 15-20%.”

In 2014 RVR’s Kenyan freight traffic grew by 24.3% from 1.24 million tonnes in 2013 to 1.51 million tonnes with Mwangi attributing it to “the acquisition of three new locomotives and the rehabilitation of the existing fleet.”

However, RVR has been grappling with falling passenger numbers, with a 5% reduction in journeys from 4 million in 2013 to 3.8 million in 2014. “The drop in passenger journeys was partly attributed to suspension of railway passenger transport services along the Nairobi – Kisumu route,” Mwangi says.

It is hoped that the improvements will attract passengers to return to the existing network. It’s a similar story on its metre-gauge suburban services in Nairobi which cover 160km of track and are currently used by 13,000 people every day. KRC is also targeting improvements in the capital’s rail services and is implementing the Nairobi Commuter Rail Service project which involves modernising and expanding under-utilised railway infrastructure to boost public transport in Kenya’s capital.

The project is aiming to attract passenger traffic from the congested city roads by creating “an efficient and affordable mass rapid transit transportation system” and KRC has set an optimistic target to increase passenger capacity in Nairobi to 15 million from the current 5 million by the end of 2016 and 60 million passengers by 2018.

Specific components of this project include upgrading of track and signalling systems, constructing a new 6.5km line from the Syokimau station to Jomo Kenyatta International Airport and adding new stations.

Maina said in February that KRC has submitted fresh requests for funds to finance construction of the airport rail link, which was first mooted in 2011, and he says this and other rail projects are now a major element of Kenya’s Vision 2030 strategy for economic development.

“Numerous projects have been put in place under Kenya’s Vision 2030 and central to this plan is the necessity to move people and goods,” Maina says. “The railway sector is on an uphill climb to make this happen.”

He adds that KRC is working tirelessly to improve its operations and facilities, enhance skills and technology transfer, and be a key strategic player in the transport industry, thus be a key contributor to national development.

The standard-gauge line is a sign of real progress and evidence that the government is starting to deliver on its vision to promote sustainable growth in Kenya and the rest of east Africa as the region strives for full common market status. And with other projects planned, all eyes are now on this line and its ability to facilitate the fast and safe movement of goods and people between Nairobi and Mombasa. If successful, the momentum to develop these other projects is expected to grow.

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