Why EA countries chose more costly route for standard gauge railway line

Saturday September 28 2013

The standard gauge railway line allows for increased capacity for more goods and passengers. Photo/File

The standard gauge railway line allows for increased capacity for more goods and passengers. Photo/File 

By Michael Wakabi The EastAfrican

Even as the region looks forward to the groundbreaking of the $11 billion Mombasa-Kampala-Kigali railway in November, it is emerging that East African governments shelved alternatives that would have slashed the estimated project cost by as much as 70 per cent.

Sources privy to the project told The EastAfrican that the three governments of Kenya, Uganda and Rwanda ignored an earlier study that had proposed the migration from the current metre gauge to the standard gauge railway line through the addition of an extra track on the current line.

This would allow both standard gauge railway line and the metre gauge line to use the existing infrastructure.

The study commissioned three years ago by the partner states — to examine options for development of a standard gauge railway — and a presentation last September to a forum by Kenya’s Transport and Infrastructure Permanent Secretary Nduva Muli suggested that the objective of migrating to standard gauge railway line could be achieved at 30 per cent of the cost of a greenfield investment — if existing rail infrastructure were exploited.

Mr Muli, who until his recent appointment to the Transport Ministry was chief executive officer of Kenya Railways Corporation, argued that a third rail could be added to the existing metre gauge.

Besides allowing for the simultaneous operation of both metre and standard gauge trains, project costs would be considerably lower because the existing way leaves would be used. Further savings would be realised from using the same foundation and alignment of the existing metre gauge.

The EAC study commissioned in 2009 said that the region could benefit from improved speeds and larger cargo volumes for the next 20 years by refurbishing the metre gauge and improving efficiency within the existing infrastructure.

But Mr Muli said last week that the decision to improve the current railway track was shelved after a further study showed it would be cheaper in the long run to start a greenfield standard gauge track.

“It is called a standard gauge because it is the globally accepted standard for most railway tracks in the world. This is why 85 per cent of all railways in the world use the standard gauge system,” said Mr Muli.

Mr Muli said the Kenya-Uganda railway does not perform because it is narrower than the standard gauge, at 1,000mm against standard gauge’s 1,435.

However, it was built 100 years ago and during construction the gradient of ascent from Mombasa to Nairobi was high at two per cent against the ideal gradient of a maximum one per cent.

“Because of this gradient, the amount of load the railway can carry is restricted. So, even if we put a standard gauge on the same alignment, with the same gradient, we shall still be limited on load. And if we want to increase the load, we have to add locomotives and this is an extra cost. The gradient also slows down the locomotive,” said Mr Muli.

It was also considered that a diesel locomotive running on metre gauge costs $3 million while a locomotive that runs on standard gauge costs $1 million.

Another issue that influenced the decision not to upgrade the current line is that there was a shortage of technology when it was built and therefore those constructing it did not know the best way to deal with obstacles like hills, rivers, and valleys.

“So they used to go around them and that is why you see our railway is winding. We have lots of curves under the current alignment, which also slows the train speed,” said Mr Muli. 

He said that improving the current metre gauge track would be the same as constructing a new line altogether.

Other sources said there was a lot of pressure from Southern African countries for East Africa to maintain and improve the metre gauge to enable future integration of the two regions’ railway lines.

But sources said the push, particularly by the South Africans, was based on other interests. The country uses the Cape Gate 1,069mm line, which is manufactured in the country. The 1,000mm line used in East Africa can easily be integrated to Cape Gate at an affordable cost.

“I have seen the study, but in that proposal the speed would be 40kph, which is not much of a change from what we have today,” said Uganda State Minister for Works and Transport John Byabagambi, who chairs the Standard Gauge Railway Steering Committee set up by the partner states.

That would be because the new track would remain hostage to the existing alignment, bends and gradient that limit speed.

According to Mr Byabagambi, cargo volumes to and from Mombasa are projected to reach 32 million tonnes in the next 10-15 years.

“Trains running at 40kph could never handle that tonnage and that is why we have decided to go for a new build line with a design speed of 89kph for cargo and 120kph for passengers,” he said.

He also explained that the new line could not fit within the existing infrastructure because the gradient of the current line is above the 0.1 degrees required. To maintain the gradient west of Nairobi, the line will tunnel its way through the Rift Valley.

“The curves we have cannot handle that and if we are going to do speeds of 80kph, you cannot have a high gradient. So it is better to spend money now because spending it in 10 years will be more expensive,” he said.

According to Mr Bybagambi, although the countries are implementing the project jointly, each will pay its share of the costs.

The line is supposed to go live in 2018, something Mr Bybagambi said puts Uganda under pressure because Rwanda and South Sudan depend on Uganda completing its line before they can be linked to Mombasa by rail.

South Sudan has already signed an MoU with Uganda. Kampala hopes to close a finance deal with China by January 2014.

“With Kenya, Uganda and Rwanda now investing in standard gauge, we are solidifying this policy for the benefit of smoother regional integration,” said Mr Muli.

Secured funding

According to current estimates, the 450km Mombasa-Nairobi leg — which is the first phase of the project and the only section for which funding has been secured — will cost $3.8 billion. This is what the Chinese government has committed to and covers the cost of rail, rolling stock, signalling and electrification of the line.

Uganda has allocated $6 billion for the lines that will run from Malaba to Kampala and Kasese and Tororo-Pakwach.

In addition there will be spurs branching off at Bihanga to Mirama Hills where it will connect with the proposed Rwandan system and another spur from Gulu to Nimule where it will meet with the line to Juba. An optional spur running from Kasese to Mpondwe on the DR Congo border is also under consideration.

That figure is almost 100 per cent of Uganda’s external debt, which stood at $5.85 billion at the end of June, representing 29 per cent of GDP.

With the first phase costing Kenya $3.8 billion, experts estimate that the more complicated terrain to the west of Nairobi could see the Nairobi-Malaba section cost double that figure, taking the project cost past 100 per cent of its external debt, which at the last count stood at $11.1 billion.

Rwanda’s debt is estimated at $1.1 billion and Burundi’s at $632 million but unlike their eastern and northern neighbours, the duo have no choice but to build from scratch.

Despite the steep cost and the fact that short of new adjustments, both Kenya and Uganda have exhausted their concessional borrowing limit, the countries’ political leaders argue that the region is better off making the necessary investment now when money is cheaper.

Because Uganda’s current ceiling for concessional borrowing is equal to only 25 per cent of the project cost and it has already been exhausted, the country will go for a hybrid of concessional and commercial borrowing.

Search for funds

Kenya is still struggling with closing financing for phase two for similar reasons and Chinese funders are understood to have asked for additional guarantees before they consider more funding.

On the other hand, Uganda is caught in its habitual procurement mess, with a catalogue of Chinese firms and their lobbyists fighting for the deal.

To fund the project, Kenya has introduced a 1.5 per cent lay on all imports into the country, with the government expected to net Ksh15 billion ($176.5 million) from the tax. It also set aside Ksh22 billion ($258.8 million) in its 2013/14 budget towards financing the project.

The emergence of a new infrastructure axis involving Kenya, Uganda and Rwanda has sent ripples through the EAC with Tanzania terming it as an “act of isolation.”

The presidents of the three countries have undertaken to meet every two months to discuss the progress of their infrastructure projects, with the next meeting expected to be held in Kigali in November.

Kenya is also developing a new $23 billion transport corridor dubbed the Lamu Port South Sudan Ethiopia transport corridor (LAPPSET) that will link the Kenyan port city of Lamu to Juba and Ethiopia through a series of railway lines, roads and pipelines.

Additional Reporting by Steve Mbogo and Peterson Thiong’o

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