Kenya is mulling terminating the standard gauge railway (SGR) in Naivasha or Kisumu after Rwanda pulled out of the flagship infrastructure project on the Northern Corridor.
Transport Cabinet Secretary James Macharia played down the impact of Rwanda’s exit even as he acknowledged that extension of the line to Malaba may no longer be necessary if landlocked states opt out.
“The decision has not been reached but we have a number of options at our disposal. We can decide to end the SGR at Naivasha or Kisumu but it will still be a viable venture due to the presence of Lake Victoria,” said Mr Macharia.
Rwanda last week announced plans to build a railway through Tanzania to the Indian Ocean noting that the route is cheaper and would take shorter time to complete.
The country’s last-minute pullout from the SGR came as a surprise to Kenya which has build almost 80 per cent of the first phase running from Mombasa to Nairobi.
Kenya, Uganda, Rwanda and South Sudan have been keen on connecting their economies via the fast-speed SGR running along the northern corridor.
Speculation has been rife that China — which is financing the Mombasa-Nairobi section of the railway — is keen on taking up the whole project.
Uganda, which is the top transit destination of Mombasa port cargo, has not build even as single inch of its section of SGR, putting pressure on Rwanda instead.
The Kenya Ports Authority sees an efficient railway link from Mombasa as a sure way of reducing congestion and outcompeting the Port of Dar-es-Salaam in the race to control cargo destined to Rwanda, Burundi, the DRC and South Sudan.
On Tuesday, Mr Macharia said Kenya was on the right footing, having previously changed its SGR route design to run through Naivasha and Narok.
Had it used the northern route to Malaba, then Rwanda’s decision would have been costlier as a large part of it would be left hanging, said Mr Macharia.
And should Kenya opt to extend the SGR to Kisumu, Mr Macharia added, it would still be viable because cargo will be transported over the lake to other East African states, making the SGR a viable economic project.
The government has already signed a commercial contract for phase 2C which will run through Kisumu-Yala-Mumias to Malaba.
China Roads and Bridges Company (CRBC) is scheduled to build a modern Ksh14 billion port in Kisumu which will be useful in connecting the rest of EAC states through Lake Victoria giving Kenya an edge in the maritime business in the region.
Nairobi sees Rwanda’s last-minute withdrawal as a retreat from the initial agreement between the three countries on the Northern Corridor signed in 2013.
A modern container port in Kisumu is likely to turn the lake-side town into a hub for trade with neighbouring countries such as Tanzania and Uganda and by extension Rwanda and Burundi as well as those in the Great Lakes region.
For decades, Kisumu port registered robust business activity helped by a reliable railway system and maritime vessels that ferried cargo to ports such as Mwanza and Bukoba in Tanzania and Jinja and Port Bell in Uganda.
Logistics firms are acquiring new trucks in anticipation of increased business once the railway line is complete.
“There will be increased demand for road transport for our customers who are located inland, away from the Northern Corridor who will still need our services. We are confident that the SGR is a partner and not a threat to road transporters,” said Mr Job Kemboi, general manager Siginon Global Logistics.