Kenya is seeking a rail operator to manage its Nairobi commuter railway system which is to be upgraded and expanded at a cost of $100 million by next year, to ease traffic congestion in the capital.

State-owned Kenya Railways Corporation and a London-based private infrastructure development trust InfraCo Ltd have put up an international tender for a rail operator to help in developing the railway system and eventually manage it upon completion.

Private consortium Rift Valley Railways’ five-year concession agreement to manage passenger rail service ends this year.

The entry of a rail management firm and the upgrade of the existing system will be a welcome relief for city Nairobi residents and visitors who have to contend with hours of traffic snarl-ups.

The deal offers world leading rail operators a fresh entry into Kenya, as the country seeks to expand its infrastructure to attract investments.

Majority of Nairobians use public service vehicle, and the the few who opt for rail transport — which is cheaper — have to reckon with unreliable service and congestion.

“The system is expected to initially comprise 10-15 commuter trains operating over four lines, one of which will be a new express link to the Jomo Kenyatta International Airport from the Nairobi Central Station,” said KR and InfraCo in the tender advertised last week.

KR managing director Nduva Muli said the project will expand the network to cover 170 kilometres, up from 61km currently.

It will also entail the replacement of the current locomotive trains with Diesel Electric Multiple Units said to be more suitable and efficient for passenger carriers.

KR statistics show city’s trains currently carry about 19,000 people a day on 41 carriages, bringing in Ksh475,000 ($5,937.5) per?

“We want to modernise the infrastructure, improve the rail quality, build new stations and then we will be providing infrastructure that encourages other transport mode interactions such as park-and-ride,” said Mr Muli, when he announced the partnership between KR and InfraCo. The two signed a partnership in 2009.

The “Park and ride” concept will see commuters park their cars in the nearest train station, ride a train into the city from where they can either proceed to their destination or connect by public transport.

This is expected to ease the parking in the city. The project will therefore see Kenya Railway and the developer invest in major parking areas and commercial hubs in main stations that will earn the company income through property rent thus increasing profitability.

In the arrangement, InfraCo will fund the initial cost of the project and will recoup the money by selling its interest to the private sector if the project becomes successful.

If it fails, the money used will be written off as a grant to the Kenyan government, meaning Kenya Railways bears no risk in the implementation of project.

The other six donor agencies that jointly own InfraCo with the World Bank are Swedish International Development Agency, United Kingdom Department for International Development, Swiss State Secretariat for Foreign Affairs, Netherlands Ministry of Foreign Affairs, Irish AID and the Austrian Development Agency.

The international tender says: “The operator will have experience in the operation of the rail systems and have technical and operational resources sufficient to support their important role in the project.” Interested bidders must apply before April 4, 2011, and must have run such a project in a country in the emerging markets.