The Kenyan government has announced plans to allocate over $ 731 million over the next three years to revamp the Nairobi-Mombasa standard gauge railway (SGR) line. Starting in July, the Railway Development Levy Fund (RDLF) will allocate money to acquire additional locomotives and freight wagons to enhance cargo transport.
Other funds will be used to construct new feeder lines and modernise the old meter gauge railway (MGR) lines. Around $43 million will be used for rehabilitating, remanufacturing, or overhauling older locomotives, wagons, and coaches.
The SGR project has been a significant investment for the Kenyan government, with the previous administration borrowing $4.8 billion to finance its construction. By enhancing the railway network and expanding its capacity, the government aims to promote trade and streamline the transportation of goods within the country.
However, the government has no immediate plans to extend the SGR within the next three years beyond the current end terminal Naivasha, around 100 km north of Nairobi.
The 592 km SGR line should further continue from Naivasha to Kisumu and the border city of Malaba at the Ugandan border. Both countries have been seeking alternative financing options for their joint SGR project, which aims to ultimately connect Mombasa and Nairobi with the Ugandan capital, Kampala.
Uganda's Ministry of Works and Transport has announced that they are currently exploring funding options from European financiers following the unsuccessful efforts to fund it from Chinese government loans. On 16 May 2023, Uganda announced that the 273-kilometre line on the Ugandan side should start construction this year. Turkish construction firm Yapi Merkezi was mentioned as the potential contractor. There is a strong desire in landlocked Uganda to connect it to the largest port in East Africa, Mombasa, on the coast of the Indian Ocean. This connection would allow smoother export of commodities, such as coffee or tobacco, from Uganda to the global markets. It would also ease the heavy truck congestion on the Ugandan – Kenyan border crossing in Malaba, where Kenyan Railways recently opened a new in-land container terminal.
The freight division of the SGR transports mainly containerised cargo between Mombasa port, Inland Container Depot in Nairobi (ICDN), and the Naivasha Inland Container Depot (NICD). The bulk cargo trains commodities are predominantly steel, grain and fertilisers. SGR is operated and maintained by Africa Star Railway Operation Company (AfriStar), contracted by the Kenya Railway Corporation (KRC), which is gradually taking over the entire operations.
