These days one is never sure what Standard Gauge Railway (SGR) story is the most current or even accurate. This unfortunately is an indication of weak public communication. My latest understanding (if correct) is that plans for the SGR extension to Kampala via Kisumu are now on hold, mainly due to doubts about Chinese funding.
However, what looks definite is that the SGR will reach Naivasha this year, and that the terminus will be equipped with an inland container depot (ICD). It has also been indicated that Uganda will be allocated land in Naivasha for cargo import/export consolidation. It is important that Kenya now concentrates on maximising the opportunities that are presented by a Naivasha terminus.
We should now scale down our regional SGR expectations, and make a Kampala destination a long-term plan, tied to Kenya’s capacity to finance. Funding need not be pegged to China’s generosity. Tanzania and Rwanda are financing their SGR from institutional and private sector loans.
I will here endeavour to do a scenario analysis on a Naivasha ICD. The prime business objective is to leverage Naivasha to maximise utilisation of Mombasa port and the Mombasa/Naivasha SGR by increasing transit cargo for Uganda, eastern Democratic Republic of Congo (DRC) and South Sudan. Rwanda cargo will be lost to the ongoing Dar-Kigali SGR project.
However, Uganda will still have options to use the Dar port, an alternative which Uganda will want to keep, to play Mombasa against Dar to maximise advantage. Uganda is already doing this with petroleum imports via Dar, giving competition to the Kenya Pipeline Company (KPC).
The Tanzania SGR is expected to terminate at the rail/road junction town of Isaka in western Tanzania, from where Rwanda will extend their SGR to Kigali. Therefore, in respect of Ugandan goods, the Naivasha ICD competitor will be an Isaka ICD.
The road from Isaka via Bukoba and the Mutukula border point to the Uganda town of Masaka is an easy approach to western Uganda towns, Albertine oilfields and eastern DRC. The alternative cargo routing to Uganda from Isaka is via the existing meter gauge railway to Mwanza from where goods are ferried across the Lake to Port Bell near Kampala.
Logistics is all about costs, efficiency, delivery times and of course security. It is on these metrics that Mombasa/Naivasha would be competing with Dar/Isaka infrastructure systems. In planning its capacity and operating systems, Naivasha will have to contend with Isaka as a serious logistics alternative for Uganda.
From Naivasha to Uganda we have the road systems and also the old meter gauge railway (MGR). There is already limited use of MGR to Uganda with SGR to MGR cargo transfers at Nairobi ICD.
Recent information indicates that the Chinese are offering funding to rehabilitate the MGR to the border town of Malaba.
There is nothing retrogressive about mending the old infrastructure as long as it is economically and technically feasible. If anything, the MGR rehabilitation will be without the infamous land compensation fiascos.
The MGR revamp presupposes that Uganda will concurrently upgrade their MGR from Malaba to Kampala.
The design of the Naivasha ICD should therefore provide sufficient and efficient capacity for SGR to road/MGR inter-modal cargo transfers. This capacity should also take into account western Kenya imports and exports. Indeed, reactivating the Kitale and Kisumu MGR branches should be explored to increase use of SGR/MGR to decongest the western Kenya roads.
The Naivasha project should be expedited to coincide with the crude oil production development projects both in western Uganda and Turkana County.
Thousands of tons of imported materials and equipment will be ferried to these oilfields from 2020 for three years. An early Naivasha start will give it an edge over Dar/Isaka in respect of Uganda oilfields cargo.
While still on infrastructure, one wonders how and why a new and expensive second container terminal at Mombasa port will be given to a still “defunct” Kenya National Shipping Line to own and manage.
The proposal is as illogical as proposed handing over of the Nairobi’s JKIA to the financially limping Kenya Airways. Is there something we are not seeing in these proposed lopsided deals – all in the same ministry?
Finally, may Naivasha flourish into a first-class regional transportation hub.