Press Center | Freight Shipping Logistics News
The international tender involves provision of preliminary design services and development of suitable financing, construction and operating model for the line.
The government set aside Sh3 billion in this year’s budget for the preliminary design of the railway that is expected to be extended to Kampala, Uganda in the future.
Managing director Nduva Muli said the experts who queried the viability of the project need to look at the wider benefits to the region.
Under the heading Off track? Experts query the new railway dream, experts had raised issues on the possibility of constructing such an expensive line.
Mr Nduva said although it will cost $3 billion (Sh240 billion) to set the project on course, it would in the long run reduce the cost of transport and doing business.
He said the cost of transport and logistics in Kenya and the region accounts for about 45 per cent of the price of goods and services compared to 15 per cent in developed countries.
“With such high costs, Kenya and the region will remain uncompetitive investment and business destinations in addition to high costs of living for the citizens,” said Mr Nduva.
He said the road system, which is more expensive, accounts for 94 per cent of freight traffic on the Northern Corridor transport artery that serves Uganda, Northern Tanzania, Rwanda, Burundi, Eastern DRC, southern Sudan and Ethiopia.
The port of Mombasa, the managing director said, is projected to handle 30 million tonnes of cargo by 2030 compared to 17 million currently.
“If the rail capacity is not increased to match this growth, the levels of congestion on our roads are beyond imagination,” he said.
Mr Nduva said the new railway would boost regional trade, while making it easier for people and cargo to move faster across the region.
Reliable transport, which is also cheaper would also unlock the potential in agriculture and lead to exploitation of other natural resources.
Uptake of cargo by railway, he said, would also cut on road maintenance and improve on safety.
Other benefits, he said, were creation of employment and reduction in carbon emissions.
Mr Nduva said governments in the region were committed to the implementation of the project with agreements being worked out to ensure cross-border development.
He said Kenya had procured a transactional advisor for the Mombasa to Malaba line that is expected to be completed by 2016.
PARASTATAL heads who signed the Mombasa port community charter risk being sacked if their agencies do not deliver on the contents of the new entity. The charter signed between the government and the private sector aims at improving the movement of cargo from the port into hinterland