May 8, 2019 / 3:21 PM / 11 days ago

Kenya to upgrade old rail track to deliver Uganda link

NAIROBI, May 8 (Reuters) - Kenya plans to modernise an old railway track to link a newer line to neighbouring Uganda at a cost of $210 million, with funding from an unidentified private backer rather than building another modern one with Chinese money.

The development of Kenya’s railways has been part of China’s “One Belt, One Road” initiative, a multi-billion dollar series of infrastructure projects upgrading land and maritime trade routes between China and Europe, Asia and Africa.

Kenya opened a modern railway linking the port of Mombasa with the capital Nairobi in 2017 at a cost of $3.2 billion. This was then linked with another new line, costing $1.5 billion and also funded by Chinese loans, to Naivasha in the Rift Valley.

The Nairobi-Naivasha standard gauge rail (SGR) line, will be opened in August but does not yet extend to Uganda.

“We need to make sure that when we commission the SGR in August, we have connectivity to Uganda from the SGR so we have to rehabilitate that line to make sure it is properly functional,” Kenyan transport minister James Macharia told Reuters, adding that the work will take a year to complete.

Macharia said that spending $150 million to rehabilitate a decades-old line from Malaba on the border with Uganda and using the rest to build another short track connecting the SGR at Naivasha would be a quicker option than building another SGR.

A Chinese loan worth $3.7 billion for the extension of the SGR from Naivasha to Malaba, which was last month reported by Kenyan media to be imminent, did not materialise, with neither government offering any explanation.

“It is much faster to rehabilitate because the (Naivasha-Malaba) SGR would take three to four years,” Macharia said, without commenting on the potential loan that fell through.

“Eventually we will do the SGR anyway but for the time being it is good to have something which is working,” the minister said, adding that the funding will come from a private firm which will recoup its investments by operating the line.

“We have got a private sector partner who will do this work. And then for the recovery we have a PPP (Public Private Partnership) arrangement with them,” he said.

Critics say Kenya is saddling future generations with debt from China, while the government says borrowing to build the infrastructure will spur economic development. (Reporting by Duncan Miriri; Editing by Alexander Smith)

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