What are the long term benefits of the standard Gauge Railway in Kenya?

Standard Gauge Railway currently under construction has to be the most expensive transport project Kenya has undertaken in the recent times.

The project which is expected to be commissioned by mid this year and start commercial operations in January next year is estimated to cost the country up to $3.6 billion, with 90 per cent supplied by a loan from China and the remaining 10 per cent to come from the Kenyan government.

Even so, the project has been met with a lot of criticism, with opposing camp questioning its economic value to the country.

Environmental issues have also been raised around the project, with the Standard Gauge Railway cutting through national parks and impacting wildlife. Despite this, the government say they have made provisions to diminish these effects

However, leading economic experts think that once completed, the railway transport will increase efficiency in cross border movement of bulky good, hence lowering the cost of doing business.

Kenya has been relying on this railway line for over 100 years, but since falling into a state of disrepair, 95 percent of cargo between Nairobi to Mombasa is transported by road.

While appearing on the recent CNN Market Place, Atanas Maina, Managing Director of Kenya Railways termed SGR as the most significant game changer that we have ever seen.

He explained that, with trains of the Standard Gauge Railway reaching speeds of up to 100 kilometres an hour, the multi-billion-dollar investment will also run alongside the old British-built line.

Atanas outlines the cost of the investment, which is roughly six percent of the country’s GDP, to the programme:

“It is 3.8 billion dollars. That includes the development, it includes 56 locomotives, it includes 1,620 wagons and it includes 40 percent of coaches.”

Aly Khan-Satchu, CEO of Rich Management Ltd who was also on the Weekly programme said that the real benefit will be from the spill over effect, the industrialization that will happen around this railway, the cheap power that people will plug into, the ability to access this big global market.

They told CNN that the expansion is expected to take trucks off the road and cargo back onto the tracks, with only five percent of cargo currently being transported by rail.

“The bulk of the cargo has gone to the road. We’re looking by the year 2025, we should be able to achieve up to 40 percent through a scheduled network,’’ said Atanas

The railway is expected to get into Uganda, with links to set to open in Rwanda and South Sudan, creating a network of viral links between ports and key cities in East Africa.

Be keen to watch the full interview on CNN International starting 1815hr today.


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