Kenya’s Railway network is a strategic platform towards building a competitive transport system in the country. It is expected to increase mobility, reduce road congestion, remove major inefficiencies in the movement of both people and goods, reduce costs of doing business which will optimally lead to the development of a competitive private sector platform key to championing local, regional and global investment in Kenya and increased wealth creation for the people of Kenya.
This will in turn promote the diversification of productive sectors and as a direct impact increase youth employment, job creation and spur economic growth with an important impact on revenue for the Government of Kenya 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 its markets integrated and more accessible for Kenyan business and the public alike.
In order to achieve an efficient and nationwide competitive railway transport system, the main users of this transport, have to be involved in its inception/design, planning, construction, operation and maintenance. This emphasizes on the need to create a synergetic link between the private sector and the government aimed at utilizing the wealth of expertise and investment capability that drives the private sector. Utilizing Kenya´s private sector knowledge and investment is a strategic solution for the development of an efficient and reliable railway system in Kenya.
The railway system represents a key opportunity to boost the tourism sector, the manufacturing sector, mining sector and trade sector. Therefore it requires private sector insight and engagement in defining comparative advantage opportunities, in the design of railway projects to support business interaction, open new markets for companies, connect people to jobs, connect cities their people and business e.g. , prioritize routes to enhance impact of key existing and potential economic hubs, link existing communities and growth areas with jobs and services in economic corridors, provide attractive locations for the construction sector to build new housing and create jobs, identify key investments in railway stations throughout the railway line e.g. hotels, trade businesses with the aim of expanding country´s businesses and generating employment. Railways are a long term business with investment decisions made today having implications for decades to come. It is therefore essential that all players in the industry collaboratively drive with the Government to deliver a railway system that provides maximum productivity, efficiency and performance for the economic sector and the people of Kenya.
To facilitate a structured private sector involvement in supporting the railway network development, the Private Sector Railway’s Consortium (PSRC) was established in 2009. The PSRC has since been comprising the country’s key private sector associations representing major economic and social sector stakeholders and will fostering the interest of the community at large consisting of the productive economic sectors, employment creation and welfare of the people of Kenya.
The PSRC also seeks to transfer capability and standardized expertise to local industries towards enhancing quality of their locally produced materials to be used in the rail construction such as metals, railway rolling stock steel, cement and locally assembled motor vehicles.
The PSRC includes member representation from the following institutions:
•Kenya Private Sector Alliance
•Kenya Tourism Association
•Kenya Tourism Federation
•Kenya Association of Manufacturers
•Mining Association of Kenya
•Federation of East African Freight Forwarders Association
•Public Transport Operators Association
•Kenya Trade Network Agency
•Confederation of Informal Sector Organizations
•Kenya Ports Authority
•Shippers Council of Eastern Africa
•Kenya Investment Authority
•East African Business Council
•Institution of Engineers of Kenya
•Kenya Motor Industry Association
•Kenya Vehicle Manufacturers Association
•Federation of Kenya Employers
•Kenya National Chamber of Commerce and Industry
•Ministry of Transport and Infrastructure
The PSRC will be involved in providing private sector support for the following:
•Design, planning, construction, operation and maintenance of the railway system
•Formulate mechanisms for private sector involvement and open access system to include the following key operational structures
-Bulk product handling
-Liquid product handling
•Safety of the railway
•Speed of the railway
•Efficiency of the railway
•Technology transfer (universities and vocational institutions)
In order to effectively achieve the above, the PSRC seeks to be tasked, institutionalized and empowered to implement and oversee a synergetic development of private sector involvement towards the railway system development and operation.
Private sector proposed inputs and interventions towards the construction and development of the Standard Gauge Railway (SGR)
At the onset, with regards to the development of the SGR and in addition to the above proposed private sector intervention avenues, the consortium seeks to facilitate the following through the national government towards developing a sustainable railway system aimed at creating a significant impact within Kenya’s Social and Economic development:
1.Creation of Economic Zone within each Station along the SGR line
The Private Sector Railway Consortium (PSRC) views it as crucial for the National government and respective County governments to allocate at least 5,000 acres per station and around the station to facilitate the creation of economic zones. These proposed economic zones will further create capacity for each station to have its own container depots, customs, loading and offloading of containers, storage of containers and facilities for truck transporters for both bringing in the containers as well as dispatching of the cargo containers.
In addition, the economic zone should be designed to provide duty free zone for manufacturing as well as commercial units such as hotels, shopping malls and offices in a planned manner with rules and regulations.
2.Development of complementary infrastructure and key utilities around each station under the SGR project
The PSRC seeks to petition the national government through the President leadership in coordination with respective ministries to strategize on creating conducive infrastructure such as efficient road networks which will complement efficiencies of the proposed economic zones as well as embark on developing key utilities essential for an effective operations of the economic zones such as water and electricity supplies, fiber optic internet accessibility among others.
To ensure accountability within respective counties towards developing and maintaining these facilities and infrastructures, the PSRC proposes direct County government planning and creation of the projects so that they are ready for operation even before the railway station is operational.
3.Creation of an additional station to address challenges of congestion and facilitate effective regional linkage
While observing potential issues of railway station congestion and cost of doing business in Nairobi, which might render the SGR project inefficient, the PSRC proposes the creation of an additional station either Eldoret or Malaba such that when the Nairobi station is operational, we do not create additional bottle-necks in Nairobi as trucks from Uganda. Rwanda, Burundi, South Sudan come to pick containers and cargo.
This in turn will facilitate linkage to the Lake Victoria Region via Kisumu hence to have a holding ground in Nakuru. Likewise connectivity with North Western Kenya i.e. Trans Nzoia , Kapenguria & Turkana – Lodwar , leading to Southern Sudan branches from Eldoret which means having a base there . The old railway ends at Kitale. Thereafter, there ought to be one joint base in Malaba/ Tororo connecting Uganda & Kenya under one stop border post .
4.Value Addition and opportunities for Kenyan business and entrepreneurs during the SGR construction process
Kenya’s private sector has a capable and existing industrial base with relevant resource, technical skills and capacity which can provide a minimum of 50% content to the railway development, keeping in mind that the country’s industries are in crucial stages of upgrading its product standards as well as strengthening its skills and capacity through various initiatives being adopted.
As such, the country’s local capability can provide content for the SGR construction with regards to products such as cement, steel, paint, concrete, furniture and cables. As a result, it is expected that there would be enhanced job creation in different sectors and Kenya’s industrial platform should use the opportunity to raise its standards as well.
5.Fast track proposed time to be taken for construction of the SGR
The PSRC considers the initially proposed 5 year period of construction as too long considering that feasibility study as well as design of the railway is already prepared. As such, the PSRC proposes that the National government, under the President leadership considers reducing the period to a maximum 3 years.
Furthermore, as Kenya stands to gain more by way of transport charges, utilization of port and other services, the government should undertake to encourage and pressurize both the Ugandan and Rwanda governments to embark on the project parallel to Kenya and not wait and start after the Kenyan project is completed.
6.Technology Transfer and Skills Development
In addition to the Ministry of Transport undertaking the above, the PSRC proposes that each County that benefits from the railway immediately sets up institutions to create young manpower with the appropriate engineering and other technological skills key for input within the SGR project
7.Regional private sector integration
The PSRC proposes capacity building for the consortium to coordinate aggressively with its private sector counter parts in Uganda and Rwanda to work closely towards coinciding operations of the SGR with that of Kenya and to share EAC challenges and solutions.
With regards to the Private Sector Counter parts in Uganda & Rwanda, the PSRC has already rolled out similar initiatives, thus at present they are establishing stakeholder teams which will in turn lead to merging a joint team at the regional level to be in tandem with the regional Public Sector committees, who are already holding joint regional meetings. In such future settings, the PSRC shall proactively collaborate as a partner to drive the project which has diverse multiplier impacts in spurring Social & Economic growth as well as fostering a higher propensity of the EAC Regional Integration.
As such, the PSRC seeks to play a regional coordination role with regards to the SGR project both at social and economic development levels. Through this capability, the PSRC will establish efforts of effectively integrate with the different states Governments (Presidents, Ministries, Parastatals) to keep them informed of the above highlighted region’s private sector developments through bodies such as the EABC.