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Kenya’s railway sector is back on track
A Standard Gauge Railway (SGR) train at the SGR Nairobi Terminus Syokimau on August 14, 2024.
What you need to know:
- The Kenya and Uganda governments agreed in 2004 to concession their respective railways together.
- Rift Valley Railways' (RVR) debacle gave birth to the Standard Gauge Railway (SGR).
Kenya’s railway sector has witnessed tremendous transformation. By June 2004 Kenya Railways had accumulated $277 million in debt, the monthly cash deficit was around $3.2 million and annual losses were about $39 million. Wagons and locomotives stood unserviced for years at times—in some cases for the lack of a single, inexpensive part.
For average Kenyans and Ugandans, travel anywhere along the line was cheaper by taxi, and took half the time. For the manufacturing sector, it was less costly to ship a 20-foot container from Chicago to the port of Mombasa than it was to transport that container via rail from Mombasa to Nairobi.
In June 2002, the Kenyan government had requested the Public–Private Infrastructure Advisory Facility (PPIAF) g to assess the kind of regulatory framework needed for transport in general, and a rail concession in particular. Shortly after the initiation of that study, the government hired the IFC advisory team to begin work on a transaction structure and tender documents. The PPIAF research, completed in April 2003, was closely coordinated with the IFC advisory work. Later in 2003 then Kenyan President Mwai Kibaki and Uganda’s President Yoweri Museveni announced that a joint concession would be prepared.
Standard Gauge Railway
The Kenya and Uganda governments agreed in 2004 to concession their respective railways together. Rift Valley Railways (RVR) signed the concession agreements in 2006 and amending deeds in relation to these agreements in 2010. The concessionaire was to rehabilitate, operate and maintain the rail networks as one railway system.
The consortium planned to invest in the railway system, upgrade it, reduce inefficiencies, use a smaller workforce and generate an annual concession fee of 11.1 per cent in each country. In addition, it would have paid US$1 million annually for the passenger service concession in Kenya and $500,000 to Uganda for the same. But both Kenya and Uganda terminated their contracts with RVR in mid-2017, with control of their national rail networks reverting to the Kenya Railways Corporation and the Uganda Railways Corporation, respectively. RVR had failed to remit concession fees for 2016.
RVR’s debacle gave birth to the Standard Gauge Railway (SGR). Since the commencement of passenger services in June 2017 and the launch of freight operations in January 2018, Afristar, the SGR operator, had transported over 15.16 million passengers and moved over 39.78 million tonnes of cargo by April.
Training in rail operations
The operator has also reduced road congestion and carbon emissions along the Mombasa–Nairobi corridor, achieving over 2,892 consecutive days of safe operations. This has also led to seamless integration of freight services with Mombasa Port and inland container depots in Nairobi and Naivasha, leading to port decongestion.
Afristar’s human capital strategy has focused on localisation, which currently stands at over 90 per cent. Over 2,000 Kenyans have received specialised training in rail operations. The successful transition of critical roles from Chinese to Kenyan personnel demonstrates that Afristar has met most of its localisation targets. Over the years, Kenyan staff have demonstrated remarkable adaptability, discipline, commitment and a strong willingness to learn, facilitating the seamless handover of key operational roles.
Achieving synergy among diverse stakeholders in a national infrastructure project is inherently complex. However, Afristar has maintained a strong relationship with Kenya Railways and various customer groups through structured dialogue and compliance reporting. This includes regular joint review meetings, timely submission of operational data, joint inspections and responsiveness to customer feedback.
As the SGR operations mark the 8th anniversary on Saturday, we must acknowledge stakeholders such as logistics firms and security agencies that have contributed to smooth operations.
The author is a communications practitioner in the railway sector
