Tuesday, July 19, 2011

Kenyan Rail Freight Link Receives Loan

Lunatic Line to be Reborn
Shipping News Feature

KENYA – Following on from our earlier article concerning the redevelopment of Lome Port, Togo, comes news that the Board of Directors of the African Development Bank (AfDB) has approved a $40 million (£24.85 million) loan to finance the Rift Valley Railways (RVR) which is the first step to revitalising the Mombasa (Kenya) to Kampala (Uganda) railway line.

Original proposals by the Kenya Railways Corporation (KRC) called for the line to operate freight trains capable of carrying a minimum of 4,000 tonnes at 75mph and double-decked passenger trains at 100mph. This is in sharp contrast with the existing infrastructure, the so-called Mombasa-Nairobi ‘lunatic line’, which was built over one hundred years ago and was made infamous during construction because of the Tsavo man-eaters episode, where two lions killed an estimated 135 rail workers. Currently this line can only haul 800 tonne loads at a best speed of 28mph.

According to figure from the AfDB it is estimated that on average 8% of goods in the region are transported by rail compared to 92% by road. Once refurbishment is complete the RVR has the potential to significantly increase freight transport as a result of expanded capacity, faster trains and improved reliability of rail assets, generating significant revenue for the Kenyan and Ugandan governments and having positive environmental effects by reducing the volume of goods transported by more polluting trucking services.

With the port of Mombasa projected to increase the cargo it handles from 17 million tonnes to 30 million by 2030, the new development is seen as crucial by the AfDB for maintaining Kenya’s economy. In addition, the corporation believes that with transportation costs in Kenya and the East Africa region constituting 40-45% of the total cost of production of goods, the new line will be vital in improving East African exports and competitiveness for the coming century.

In a statement the AfDB said:

“The AfDB loan to RVR supports the region’s plan to shift from road to rails to ease the burden on the roads, as well as enhance the Bank’s efforts to contribute to major infrastructure development in the region.

“The loan to support the rehabilitation of the Rift Valley Railway is a top development priority for both Uganda and Kenya. The project aligns explicitly with the Bank’s assistance strategies for both countries as well as the Bank’s regional integration strategy for Eastern Africa. It is in harmony with the Bank’s strategic priority to expand Africa’s economic infrastructure as well as current efforts to increase financing from the Bank’s private sector window in low-income countries.”