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Why Uganda is worried over Kisumu old rail line upgrade

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Kenya’s decision to rehabilitate an old line to Kisumu instead of extending the proposed standard gauge railway (SGR) line to Malaba has thrown Uganda’s project in disarray as Kampala is not sure on where to terminate its line.

Uganda officials said they will start the construction of its 271- kilometre long SGR in June even if Kenya does not extend its line to Malaba.

Perez Wamburu, the SGR project co-ordinator for Uganda, said chances of reaching a loan deal with the China Exim Bank are increasing.

He told the media that one of the major outstanding issues is the connection with Kenya, which came into doubt after Nairobi paused its SGR development in Naivasha.

“We shall be sitting with Kenya and China Exim to bring clarity to issues of the interconnection but everybody is still committed to this project,” Wamburu said.

The move to go ahead with the project implementation is predicated on the assumption that by the end of the projected construction period, East Africa’s largest economy would have resolved whatever issues are holding up the extension of its SGR to Malaba, on Kenya’s western border with Uganda 

However, Uganda’s plans to build the rail line to Malaba could leave them with a dead-end project as Kenya has instead opted to refurbish the old line to Kisumu to  form the major supply route to deliver cargo to the neighbouring countries through the Lakeside port.

The rehabilitation work on the Kenya’s old to Kisumu  started in August and is expected to take between 8 and 12 months.

Kenya Railways promises to rehabilitate both the line to Kisumu and Malaba.

Western region

“By revamping the section of the metre gauge railway (MGR) line leading to the western region, we are looking to link the Standard Gauge Railway line and the metre gauge railway line in order to provide a seamless connection between the Port of Mombasa and Lake Victoria in Kisumu,” Kenya Railways says in a statement on its portal.

The State agency adds it will also connect the Longonot line to  the main border point with neighbouring Uganda at Malaba.

“The end result will see the corporation transport cargo exclusively on rail albeit with an interchange from SGR to MGR line at Longonot station,” it adds. 

Kenya dropped its plan to extend the standard gauge railway to Kisumu and later on to the Ugandan border after failing to secure a multi-billion shilling loan from China, which funded the first and second phases of the project.

Lack of a directline to Malaba has also seen Uganda consider the viability of the line without a direct interface with the Kenyan system, with the cargo instead being ferried on water to a facility to be developed in Majanji on Lake Victoria.

That would allow cargo from South Sudan and North Eastern DR Congo to be shipped to either Mombasa through Kisumu or onward to Dar es Salaam through Mwanza.

Another scenario sees Kenya eventually bringing its line all the way to Malaba, while the other one is a hanging line running from Kampala to Malaba.

Work on the long-delayed SGR will now start in the 2022/2023 Uganda fiscal year even as the connection with Kenya remains a sticking point, Wamburu hinted while speaking during a recent briefing for Ugandan media.

“The parties had narrowed the number of outstanding queries from 27 when Ministry of Finance reapplied for funding in October 2019, to just three today,” he added.

Conclusive talks

“I think we have answered all those queries satisfactorily and conclusive talks should start soon after the elections.

The other concerns are around the operations plan for the network and finally, the loan repayment plan.” 

The viability of the line under different scenarios remains positive and a Chinese company will operate the network for the duration of the loan repayment period before handing over the assets to Uganda,” Wamburu said.

He said a direct interface with the Kenyan SGR would be the better option, but the line would still have a positive rate of return whichever way but with varying margins.

The rehabilitation of the Old Nakuru-Kisumu railway line has officially kicked off. 

The project which is estimated to cost Sh3.8 billion will be completed in eight months’ time in a bid to boost the transportation of cargo to various parts of the country and the East African Region.

In summary

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