EAC Partner States agree to boost SGR development through shared funding

KAMPALA, May 6, 2024 – Northern Corridor Integration Projects [NCIP] partner states, comprising Kenya, Uganda, Rwanda, and the Democratic Republic of Congo, have agreed to jointly mobilise funds to fast-track the development of the Standard Gauge Railway [ SGR ] project.

The East African Community [EAC] transport ministers reaffirmed their commitment to expediting the completion of the remaining SGR sections from Naivasha in Kenya to Uganda, Rwanda, South Sudan, and DRC. Specifically, Kenya has committed to resume the construction of the Naivasha-Kisumu-Malaba and Kisumu-Malaba SGR sections starting in July and September 2024, respectively.

Uganda is also expected to start the construction of Malaba-Kampala in September, subject to the availability of resources, and is in the final stages of negotiations with the proposed contractor, Yapi Merkezi, with the contract expected to be signed by the end of May 2024.

Fred Byamukama, Uganda’s State Minister for Transport, representing Gen. Edward Katumba Wamala, Minister of Works and Transport of Uganda and Chairperson of the Joint Ministerial Committee on SGR, emphasised the country’s commitment to the project.

“We have agreed to source funds jointly because this railway line doesn’t stop in one country. Once we source funds jointly and also use the same contractors, work will move smoothly,” he said.

“We are committed to fast-tracking the development of the SGR project to enhance regional transport integration and promote economic growth. This project will have a transformative impact on our region’s economic development, and we are committed to ensuring its successful implementation.”

As the Chair of the infrastructure cluster meeting of the NCIPs, Uganda played a key role in facilitating the ministers’ agreement. Kipchumba Murkomen, Kenya’s Cabinet Secretary of Roads and Transport Ministry, said they are in discussion with the private sector and the EXIM Bank to shoulder part of the financing. The remaining stretch from Naivasha-Kisumu-Malaba line is estimated to cost the country around $5.3 billion.

“The dream of SGR is on. As Kenya, we will leverage on the private sector now, and I know that the project we have from Naivasha to Malaba, including the improvements around Kisumu Port, will cost the country around $5.3 billion,” said Kipchumba.

“We are in discussion with the private sector to see if we can structure an arrangement for them to take the large burden at very reasonable and concessional terms so that we can continue with the project.”

The ministers welcomed the commitments of partner states to commence construction of various SGR routes, including Naivasha-Kisumu-Malaba, Malaba-Kampala, Kampala-Bihanga-Kasese-Mpondwe leading into DRC, Bihanga-Mirama Hills leading into Rwanda, Tororo-Gulu-Nimule leading into South Sudan, and Gulu-Pakwach-Vurra leading into DRC, after securing financing for the Malaba-Kampala SGR section.

Jimmy Gasore, Rwanda’s Minister of Infrastructure, emphasized the need to keep SGR as a regional project, explaining that Kenya will not benefit from the full potential of the project given the heavy investment involved if the project is not extended all the way to Uganda, Rwanda, and other countries within the corridor.

“We have reiterated our need to coordinate and package this project as a regional project so that we develop in harmony. It will, for example, not help us to develop our section, that is Kigali-Mirama Hills, if the Naivasha to Malaba and Malaba-Kampala-Mirama Hills is not developed,” said Mr. Gasore.

The ministers noted progress made so far, including the completion of the Mombasa-Nairobi-Naivasha SGR section, which is fully operational, and the harmonization of technical specifications and standards for SGR by Kenya and Uganda.

According to Amb. Richard Kabonero, Coordinator of the NCIPs for Uganda, the SGR is a critical artery at the heart of the region’s efforts to reduce transport costs and make East Africa competitive. “We are working hard towards the 15th Summit of the Heads of State to revive the momentum that we had in the past,” he added, noting that the SGR project is one of the most ambitious projects.

The European Union delegation in Uganda has been supporting Uganda’s Ministry of Foreign Affairs under the NCIPs coordination efforts.

The ministers who were meeting in Mombasa, Kenya also agreed to establish a framework for cross-border maintenance of SGR assets and facilities, harmonise planning and development of inland water transport infrastructure, and fast-track the review of the Tripartite Agreement on water transport on Lake Victoria. According to the joint communique, the Democratic Republic of Congo has committed to assent and ratify the existing SGR protocol and SGR Tripartite Agreement.

Railway transport is the second most important mode of transport after road and critical for long distance freight along the main transport corridors.

The East African Community [EAC] acknowledges the need to rationalise rail development within the region and to harmonise road and rail transport operations along the main corridors and has therefore, prepared an East African Railways Master Plan to guide the future development of the railway services in the region.

Tanzania has a total of 3,676 km of railway lines operated by two railway systems, Tanzania Railways Corporation (TRC) and Tanzania – Zambia Railways [TAZARA] but has of recent launched the SGR operations.

Due to poor conditions of tracks and ageing rolling stock and locomotives, tonnage freight volumes and passenger numbers have continued to fall every year. However, efforts have been taken and some sections of the railway lines have been revamped, leading to an increase in the numbers of passengers and cargo.

Kenya has a rail network of 2,778 Km of lines. The mainline connects the Port of Mombasa to Nairobi and to the Kenya / Uganda border at Malaba. Even though the freight performance has also continued to decline, it still plays a critical role in the transport of export and import goods which account for about 35% of the long haul freight traffic handled at the port of Mombasa

In 2017, Kenya opened the 579 km Nairobi – Mombasa SGR, while runs parallel to the Kenya / Uganda railway line. The introduction of the SGR has seen an increase in freight and passengers between Mombasa and Nairobi.

Uganda’s total developed rail network covers 1,250 km, until recently only 265 km are currently serviceable due to abandonment or closure. Uganda Railways Corporation (URC) has embarked on an ambitious revamping exercise in an effort fast-track development and spur trade. URC has also relaunched cargo services to the Port of Dar es Salaam in Tanzania following more than decade of dormancy.

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