Museveni lifts hope of extending Kenya’s SGR to Uganda border

Uganda’s President Yoweri Museveni has announced plans to build a new standard gauge railway(SGR) linking the country’s capital, Kampala with the Kenyan border, raising hope for the completion of a similar link between Naivasha and Malaba via Kisumu.

“We’re going to build a brand new [SGR line] from Kampala to Kasese. Later on, we will [extend it] from Kampala to the border of Kenya and then to South Sudan,” he told the third biannual meeting of private sector chief executive officers in Karuma on Tuesday. “We want [to lower the] cost of transport [and] improve our competitiveness,” he added.

President Museveni’s announcement revives the hope of extending the Chinese-funded SGR from Naivasha to Malaba via Kisumu.

Currently, goods destined for Uganda from Mombasa port are transported by road from Naivasha where the multi-billion shilling SGR line from Mombasa ends.

Apprehensions

There have been apprehensions that the Mombasa-Naivasha SGR line, which cost an estimated Sh477 billion, including financing costs, would not be economically viable if it is not connected to Kampala, which is a major user of the Mombasa port.

The latest decision by Uganda poses a fresh dilemma for Kenya, which had abandoned plans to extend the SGR line to Kisumu and later on to the Ugandan border.

This is after Kenya failed to secure a multi-billion-shilling loan from China, which had funded the first and second phases of the line. Kenya maintains that rehabilitating the Naivasha-Malaba line and building another short track connecting the SGR at Naivasha is quicker compared to building another SGR.

The two countries have also previously differed over the financing of the cross-border SGR, with China Exim Bank insisting that Kampala has to get Kenya’s commitment to building the railway from Kisumu to Malaba before Uganda can secure funding for the line running from Kampala to the common boundary.

Major shift

President Museveni’s declaration on a new SGR marks a major shift because Uganda, in May last year, signed a Sh5 billion deal with a Chinese firm to revamp its century-old metre gauge railway line between Malaba and Kampala to create seamless travel from the Mombasa port.

According to the deal, the 260-kilometre Kampala line would be linked to the SGR track through the Naivasha to Malaba old railway, which Kenya is upgrading. Once completed, goods from the Mombasa port will be transported seamlessly via SGR and metre gauge rail to Uganda.

The signing of the Sh5 billion deal was witnessed by Kenyan officials who had accompanied retired President Uhuru Kenyatta to Kampala when President Museveni was sworn in for his seventh term. The SGR line linking the port of Mombasa with Nairobi was opened in May 2017. It was later linked with the Sh150 billion line to Naivasha, which started operations in August 2020.

Kenya’s earlier priority seemed to have been to take the SGR line to Kisumu port as part of a plan to have Uganda and Rwanda evacuate their goods via Lake Victoria. Kisumu port is a critical hub for trade with neighbouring countries.

It has undergone major upgrades since 2019, with works including concreting of the port yard, construction of the quayside, repairs of the linkspan, revamping the dry dock, and rehabilitation of all buildings to boost efficiency.