Sh3.3bn set aside for new gauge rail line

The government is seeking ways of speeding up the construction of the proposed modern railway line linking Mombasa and Kampala.

The Standard Gauge Railway, with a branch line to Kisumu, has experienced procurement challenges since Kenyan and Ugandan governments entered into a bilateral agreement in 2008 to fast-track its development.

“I now expect the Kenya Railways (Corporation) to conclude the design study by end of November 2011 to provide us with the estimated cost, routing and implementation arrangements,” Finance minister Uhuru Kenyatta said on Wednesday in his Budget speech.

He said the Treasury has initiated discussions with development partners to find resources for quick completion of the project, whose tendering process was cancelled twice last year.

“I have set aside Sh3.3 billion as mobilisation fund to initiate its implementation,” said Mr Kenyatta.

When completed, he said, it would reduce cost of transportation and make Kenya’s products competitive by at least 70 per cent and cut demand for imported fuel by at least 30 per cent.

He noted that it took a whole day and costs about Sh100,000 to transport a 20-foot container from Mombasa to Nairobi.

The same container would cost about Sh40,000 and be delivered in about four hours through a modern railway transport.