Kenya opted to upgrade its old railway track after failing to secure a multi-billion-shilling loan from China, which had funded the first and second phases of the new Standard Gauge railway line. If everything had gone to plan the Nairobi-Naivasha SGR line was meant to be connected to the old railway line running to the Malaba border town and then to Uganda paving way for seamless movement of cargo from the Mombasa port to Uganda.
The ultimate aim was to ensure the line eventually reached Kigali.
However, the cost to upgrade the old railway line which the government had estimated would cost Sh21 billion ($210 million) have shot through the roof, shattering the plans into smithereens.
“Quotations from the Chinese contractor were beyond government expectations and it brought the upgrade costs almost close to building a new SGR line,” a source who sought anonymity told Business Daily.
According to sources familiar with the project the quotation had surpassed the envisaged budget by more than three times.
“The private investor was going to charge hefty fees to recover their investment based on the Chinese quotations.”
Ministry of Transport now says fresh approvals for the revamp of the old line are needed if the project is to see the light of day.
The public-private-partnership contract would have helped the government avoid tapping more loans while providing a reliable railway connection between Naivasha and the Ugandan border for onward connection to Kampala.