The Standard Gauge Railway is a strategic platform for building a competitive transport system in Kenya. It will increase mobility, reduce road congestion, remove major inefficiencies in the movement of both people and goods, and reduce costs of doing business. These will in turn lead to the development of a competitive private sector platform which is key to championing local, regional and global investment in Kenya and increased wealth creation for the people of Kenya.
An efficient railway system in the country will support the diversification of productive sectors and, as a direct consequence, increase employment and spur economic growth leading to an important impact on revenue and increased wealth for Kenyans. In addition, this new and faster connection will enable new economic opportunities, create business in the East African region and make the region’s markets integrated and more accessible.
In order to achieve an efficient and nationwide competitive railway transport system, the main users have to be involved in its inception/design, planning, construction, operation and maintenance. This involvement emphasizes the need to create a synergetic link between the private sector and the government. Utilizing Kenya´s private sector knowledge and investment capacity is the strategic solution for the development of an efficient and reliable railway system in Kenya.
The Private Sector Railway’s Consortium
In 2009, at the initial stage of the private sector involvement in Kenya’s railway system development, a private sector driven council established the Standard Gauge Railway Committee (SGRC).The SGRC was a Kenya Railway driven initiative that failed to make progress thus, as a way forward, an alternative in the form of a consortium was proposed. This consortium comprises the country’s key private sector associations representing major economic and social sector stakeholders. To realize a structured contribution of the private sector towards the development of Kenya’s railway system, there was a call for the transformation of the SGRC into an independent institution, thus the Private Sector Railway’s Consortium (PSRC) was created. The role of the consortium is to foster the interest of the business community at large. This community consists of the productive sector and concerns the employment and welfare of the people of Kenya. The PSRC also seeks to transfer capability and technical expertise to local industries towards enhancing the quality of locally produced materials such as metals, railway rolling stock steel and cement so that they can be utilized in rail construction.
The consortium includes the following members: the Kenya Private Sector Alliance (KEPSA), the Kenya Tourism Association, the Kenya Tourism Federation, the Kenya Association of Manufacturers, the Mining Association, the Public Transport Operators Association, the Kenya Trade Network Agency, the Confederation of Informal Sector Organizations, and the Kenya Ports Authority. Other players include the Kenyan Shipping Council, the Kenya Investment Authority, the East African Business Council, the Institution of Engineers of Kenya, the Kenya Motor Industry Association, the Kenya Vehicle Manufacturers Association, the Cement Association and the Ministry of Transport and Infrastructure.
The consortium is involved in scrutinizing the design, planning, construction, operation and maintenance of the railway system. It also participates in formulating mechanisms for private sector involvement and the open access system so that they include the following key operational structures: bulk product handling, liquid product handling, container transportation and passenger transportation. The consortium is also interested in safety of the railway, railway services, passenger services, competitive pricing, speed of the railway, and the efficiency of railway and technology transfer.
Proposed avenues of cooperation
In addition to development the SGR and the above highlighted areas, the consortium emphasizes the need to create economic zones within each station along the SGR. There is the need to develop infrastructure as well as related utilities around each station under direct implementation of the respective county governments. This will include, among others issues, creation of efficient road networks, water and electricity supplies and fiber optics internet accessibility.
We propose for the creation of one extra station in Eldoret or Malaba in order to accommodate regional trucks and container traffic rather than solely relying on and congesting the Nairobi station. There should be emphasis on the need to ensure effective value addition and opportunities for Kenyan business and entrepreneurs during the SGR construction process. This in turn is expected to facilitate an increase in local job creation within industries such as furniture, cement, steel, paint, concrete and cabling.There is need to fast track the construction process of the SGR from an initially planned five-year period to a maximum of three years while ensuring parallel construction by regional governments (Uganda and Rwanda) of their lines.
We emphasize the need to facilitate technology transfer and skills development with each county by setting up relevant institutions to accommodate these complexities. In order to work closely towards coinciding operations of the SGR, the consortium should be able to coordinate aggressively with its counterparts in Uganda and Rwanda. Because of these needs, the consortium seeks to be tasked, institutionalized and empowered to implement and oversee a synergetic development of private sector involvement towards the railway system development and its operation.
Following the pre-planning meetings held at KEPSA on 10-12 September 2014, the private sector raised points about most of the caucus discussions. The meetings brought together local private sector organizations interested in participation in the SGR development in order to plan on appropriate ways to engage with the Kenya Railways Corporation (KRC) and China Road and Bridge Construction Company (CRBC).
Some of the concerns raised include the definition of local content. In addition, the private sector does not know the details of the program of works and bill of quantities. This information is needed to enable the contribution of 40% local content to the project. Further clarification is needed on the standards guiding this project and other details. The KRC representative mentioned that Chinese and American standards are in place, yet there is a need for structured dialogue between KRC, CRBC and KEPSA to take place soon.
In conclusion, the railway gauge will serve this generation and future generations efficiently if decisions render long-term business investment. To this end, the private sector will work together with the government to build an efficient, productive and a high performance railway.