The three East African nations, Kenya, Uganda, and Rwanda have a grand master plan of constructing 2,000 kilometers long Northern Corridor Standard Gauge Railway (SGR) line. The line will run from the coastal city of Mombasa in Kenya, through Kampala in Uganda and stop at Kigali in Rwanda.
So far the SGR line has been constructed between Mombasa to Nairobi running some 472 kilometers costing Ksh. 327 billion. Kenya is currently in talks with China for another loan that will see the extension of the line from Nairobi to Naivasha-Kisumu-Malaba; Malaba being the border town between Kenya and Uganda.
Fears had earlier set in after Uganda was viewed to be developing cold feet and wanting to pull out of the project. An exit by Uganda would have been a blow to the SGR project, and possibly a bigger loss for Kenya who had already commenced constructions mostly on China-loans.
However, these fears have been allayed after Uganda started talks with China’s Exim Bank for a $2.3 billion (Ksh. 236.7 billion) loan for the construction of a 273-kilometer long line running from Malaba to Kampala. The construction work tender will be given to China Harbor Engineering Company, who is expected to take 40 months to get the job done.
Exim Bank, who is the financier of both the Kenyan and Ugandan line, had laid down conditions that must be met for the bank to grant the two countries load. The Bank wants one operator to conduct the maintenance work for the SGR line running from Mombasa to Kampala.
Rwanda impressed by construction of Kenya’s side of SGR line
Rwanda’s High Commissioner to Kenya, James Kimonyo said yesterday that his government if finalizing talks with the China’s Export-Import Bank for a $1.2 billion (Ksh.123.5 billion) loan. That will be used to fund the SGR line running in the Rwandan section.
At Kenya-Rwanda business forum held this year, Kimonyo said: “We are getting ready to start as Kenya does its part and Uganda engages financiers from China. We have done a feasibility study and will begin soon after finalizing talks with the Exim Bank and other partners.”
Kimonyo went further to urge Uganda who was earlier feared to be getting cold feet on the project, to expedite construction on its side. “We want Uganda to move with the same speed as Kenya.”
Following news that Uganda could pull out of the project, Rwanda had made it known that it was considering re-routing its SGR line from the Uganda-Kenya line and pass it through Dar es Salaam in Tanzania. Such a move would have been a big blow to Kenya who had already commenced construction on borrowed funds, and minimized the viability of such a mega project in terms of revenues generated post-construction to pay back the loans.
Rwanda, which is currently ranked first in the ease of doing business in the region by the World Bank, has also called on other international investors to jump in to invest in not just the Rwandan SGR line but the country in general.
“We remain committed to ensure SGR and other infrastructure projects along the Northern Corridor works effectively,” said Kimonyo.