Kenya: New rail line will reduce cargo costs by 60%

The high-speed rail project, to be completed this year, will give Kenya an economic boost, and join it additional closely for trading with neighboring nations in East Africa, a railway official said on Thursday.

Phase one of the construction of the Kenya high-speed Standard Gauge Railway is almost complete, Kenya Railways Managing Director Atanas Maina said. Phase two is due to start early this year, he added.

The line will run from the Kenyan port city of Mombasa to the Kenyan capital Nairobi, and, once Phase two of the construction of the rail is completed, it will be extended to neighboring Uganda and onward to Rwanda and South Sudan.

China Eximbank is commited to providing Kenya with a $1.5 billion loan for the completion of the railway from Nairobi to the Ugandan border; Kenya will provide the balance which is 15 % of the total all needed.

By connecting Kenyan cities with neighboring nations, the railway will provide a much-needed economic boost, Maina said, adding that the railroad should be up and running by 2017.

The construction of the high-speed rail network started in 2013 and is set to dramatically reduce cargo transport costs by 60 %, according to Maina. According to the Kenyan government, the freight railway lines will carry about 22 million tons of cargo annually.

“Work on the railway line has so far employed additional than 25,000 Kenyans and 2000 Chinese expats, so this has created a lot of jobs for young people,” Maina said.

“Once complete the rail will be ferrying goods and people from one country to an extra in the East African community. Some of these nations are landlocked and rely on the 100-year-old rail to import goods. Better transport will help business to boom and I believe Kenya will benefit most,” Maina added.

Maina said that the high-speed rail line will boost transport speed to 120 kilometers per hour (74.5 miles per hour) from 60 kilometers per hour (37 miles per hour).

“Completion of phase one means that Kenyans can start using the railway to travel to the coast. This will boost tourism and both Kenyans and foreign tourists will be using the railway, so they will get a rare luck to see how beautiful Kenya really is,” he said.

Maina added that apart from ferrying people, the modern trains will as well be ferrying goods from the port city of Mombasa at an increased speed that will improve commerce.

Once the railway reaches Nairobi over 50,000 Kenyans will be due or not instantly employed under the railway project, according to Kenyan government estimates.

Economists said that the completed project will provide a great impetus to the Kenyan economy.

“The government’s spending on the Standard Gauge railway has hurt the Kenyan economy, but once the railway has been completed again the economy will shoot up, the railway will boost trade not only in Kenya but between East African nations,” economist Karithi Murimi said. “The railroad will put Kenya in the center of a circle of East African nations.”

Murimi cited a World Bank study which said that the railroad could help Kenya to have the highest economic increase in sub-Saharan Africa for the next 15 years.

The high-speed railway is the major single investment made in Kenya since it gained independence in 1963.