The transformative benefits of the Standard Gauge Railway

The transformative benefits of the Standard Gauge Railway

The launch of the first phase of the Standard Gauge Railway (SGR) marks one of the greatest milestones towards the achievement of Kenya’s Vision 2030. The last time a railway line was constructed in Kenya was between 1896 and 1901.The Metre Gauge Railway (MGR), famously known as the Lunatic Line, was known for costly and dangerous construction. The trains that later used it were referred to as the Lunatic Express and had lengthy delays and breakdowns. Since then, little effort has been made to improve or even expand the MGR.
In an attempt to review the sub-sector, a concession was signed between Kenya Railway Corporation (KRC), the Uganda Railways and Rift Valley Railways (RVR) in 2006. Under the RVR concession, underinvestment has continued to hamper operations; the initial investment of $80million by the RVR was insufficient to address the infrastructural gap. Lack of an independent rail regulator was also cited as a major hindrance to the smooth implementation of the concession. To date, termination notices have been issued by both Kenya and Uganda for breach of contract by RVR.

Compared to the MTR, the new railway has enhanced features and bigger
capacity. The SGR has a gauge of 1,435mm in width that enhances speed and axle loading of 25 tonnes while the MGR has a gauge of 1,000mm in width and an axle loading of 16 tonness. SGR freight train can move 4,000 tonnes at once compared to 1,000 tonnes for MGR. The SGR is suitable for doubled stacked while MGR is not.
Compared to other railway lines in the region, the SGR took a shorter time to construct. The construction of Ethiopia-Djbouti line (750km) took an estimated five years (2011-2016) while the Morocco line that connects the city of Casablanca and Tangie (350km) took four years (2011-2015). Kenya’s SGR from Mombasa-Nairobi (472km), on the other hand, took an estimated 3.5 years (Nov 2013-May 2017).

Kenya’s SGR has 33 crossing stations compared to 18 stations and six stations in Ethiopia and Tanzania respectively.
Apart from Kenya, most countries such as Ethiopia, Morocco, South Africa and Tanzania railway models also target passenger traffic. However, Kenya plans to move 8 million passengers compared to 750 thousand and 5 million passengers in Ethiopia and Tanzania respectively.

The completed phase of SGR traverses eight counties: Mombasa, Kilifi, Kwale, Taita-Taveta, Makueni, Kajiado, Machakos and Nairobi. In addition, the SGR has 23 passing stations, eight intermediary stations and two major stations in Mombasa and Nairobi with a capacity to transport a maximum of 1,200 passengers at once from Mombasa to Nairobi and the same capacity on its return journey. Currently, the train has two passenger trains per day with an intention to extend to four per day.
The resultant bus/matatu stops at the railway stations will provide a wide range of networking and coverage as well as opportunities to expand economic activities in the region.
The complete construction, successful launch and on-going operations of the SGR Phase I, paves way for the commencement of Phase 2A (Nairobi-Narok), which is anticipated to be complete by May 2018 and will cover a distance of 120km. This phase will traverse two counties –– Nairobi and Narok. More importantly, the SGR is expected to extend to Uganda –– from Malaba to Kampala –– covering a distance of 273km. The SGR will link the Sudan-Ethiopia Transport and Development Corridor (LAPSSET) project with the Northern Corridor. The SGR project will traverse; Lamu to Isiolo (530 Km); Isiolo to Moyale (470 Km); Isiolo to Nakodok (720 Km) and Isiolo to Nairobi (280 Km).
The SGR is expected to play a significant role in decongesting the port of Mombasa thus enhancing its efficiency. For Mombasa port to enhance its efficiency it requires to be served by adequate road and rail network to ensure that offloading and clearance of the cargo is prompt by reducing ship turn-around time and cargo dwell time at the port. These are critical indicators on port efficiency.
According to the Vision 2030, the SGR line from Mombasa to Malaba is expected to handle approximately 50 per cent of the freight cargo throughput, thus easing congestion on our roads, with subsequent gains in lower cost of doing business. The road network currently carries more than 95 per cent of cargo received at the Mombasa port. The first phase of the SGR has a design capacity to transport 22 million tonnes of cargo, which is equivalent to 80 per cent of the total cargo at the port as at 2016.
Globally, evidence shows that railway caters for a significant share of the national freight task, with roads being comparatively better suited for the last mile mode due to flexibility and ability to reach the final destination. Cooperation among transport operators on the other hand will enhance agglomeration of services and promote synergy in the transport and logistics value chain. A case in point is the complementary role between rail and road freight for last mile transport of cargo, and the accessibility to train stations by bus and taxi services.
The introduction of the SGR is beneficial as it increases transport options and choice to the public. For the passenger services, in addition to saving time on traffic jam and reducing their exposure to road accidents, the current fare charges leaves some money in their pockets to even explore the tourist sites along the rail line. The Kenya Tourism Board can take advantage of this to promote domestic tourism.
Plans are underway to operate passenger services in seven intermediate stations between Mombasa and Nairobi by July. This will serve more people along the route and enhance accessibility.
To ensure security and safety of passengers, several measures have been put in place, including: Erection of a fence along the railway line, police patrols and adoption of surveillance technology to ensure real-time monitoring of the line and prompt mitigation of hazards and security threats.
In the recent past, Kenyan roads have witnessed increased road carnage and SGR is anticipated to reduce such incidents. Other risks such as cargo theft, passenger injuries and fire may require a review of the Insurance Act to incorporate railway insurance.
The freight market on the other hand is keen on reliability of services in terms of seamless flow of cargo. The SGR is expected to enhance the effectiveness of the logistics value chain by ensuring goods arrive at the scheduled destinations on time, at a reduced freight rate and without pilferage. The freight rate adopted at USD 500 per container and USD 0.07 per tonne kilometer will effectively reduce the cost of transporting cargo.
In addition, the passenger travel time between Mombasa and Nairobi will be reduced to approximately 4 ½ hours compared to 8-10 hours for buses and cargo freight time of 8 hours compared to 24 hours for trucks. This will improve efficiency in transportation, directly benefiting the economy with reduced costs of doing business. Sectors such as agriculture, mining, manufacturing, and trade benefit from timely delivery of goods and ease of transporting bulk cargo. This will, however, have to be matched with quick clearance of cargo at the inland depots.

The construction of the first Phase of SGR has created more than 35,000 direct and indirect local jobs. It is anticipated that the construction of SGR will continue to create more jobs and promote local enterprises. This is partly attributed to the government policy of ensuring that 40 per cent of the labour, goods and services used in the construction of SGR come from Kenya. Besides, the 40 per cent local content is a requirement for skills and technological transfer to enhance local capacity through training.

To date, an estimated 300 Kenyan youth have been trained on railway technology courses in locomotive and rolling stock engineering, signaling, telecommunications control and transport management. Some youth have been trained locally at the Railway Training Institute (RTI) while majority have been trained in Chinese institutions. Those employed with these skills are over 100. It is expected that once both passenger and freight services are optimally functional, the SGR will employ about 2,500 people. Around 3,500 Chinese expatriates were engaged during the construction of the SGR and about 1,250 are working for the SGR operations. The plan is for local experts to progressively replace these expatriates over a period of five to 10 years.
Local suppliers of steel, timber, cement, sand and aggregates, which are project inputs for SGR construction, and food service suppliers have also benefited from the business generated during construction and will this be enhanced in the next phase.
Environmental gains will also be realized as a result of the SGR. The SGR is expected to reduce the energy demand for the transport sector and consequently lower emissions. Worldwide, road users account for about 71 per cent of transport carbon dioxide emissions, while railway, aviation and shipping makes up less than 1.8 per cent, 12.3 per cent, and 14.3 per cent respectively. Rail transport is fuel efficient; an average train has an efficiency of 400 ton-miles per gallon compared to around 130 ton-miles per gallon. Road transport currently accounts for more than 73.7 per cent of fuel consumption in the country. Reduced consumption of fuel would help in saving on foreign exchange and the import bill. The SGR will subsequently help in mitigating climate change and its adverse impacts to the economy. In addition, when compared to roads, railway has a lower demand for land and hence has a lower environmental footprint.
There are also opportunities that would be coming with the Chinese Silk Road initiative. The initiative plans to develop a network of modern trading routes connecting over 70 countries. Kenya is situated along the ancient natural maritime route and through the LAPSSET project, which is an extension of the Maritime Silk Road, the initiative will create massive economic advantages for Kenyans. Also, the initiative will address the challenges from the closure of Suez Canal that led to fewer ships docking at the port of Mombasa and lower volumes of cargo ferried using rail.
But to ensure that the SGR remains productive, maintenance of infrastructure for both rail and related equipment such as locomotives and wagons will be critical. Learning from previous experience, KRC signed an agreement with the China Road and Bridge Corporation (CRBC) to operate, maintain and service the Mombasa-Nairobi SGR. Apart from having an operation and maintenance contractor in place, the SGR is of a superior design (Class 1), catering for a robust and low maintenance requirements. It also has an installed signalling system that monitors the condition of the line and the locomotives.

Article by KIPPRA Policy Analysts from the Infrusctructure and Economic Services Division