The government has set aside a Sh3.7 billion allocation for the construction of a railway line connecting the Standard Gauge Railway (SGR) to the old track from Naivasha to the border town of Malaba, which is being rehabilitated.
A supplementary budget tabled in Parliament shows that Sh2.7 billion will be spent on the construction between Naivasha Internal container Depot (ICD) and the Longonot railway link. A further Sh1 billion will fund the rehabilitation works of the century-old Longonot- Malaba metre gauge railway.
Construction of the new 23.5-kilometre track from Naivasha to Longonot started in August last year.
“Sh2.7 billion is for construction of the Naivasha ICD-Longonot railway link and Sh1 billion is for rehabilitation of the Longonot-Malaba MGR,” Treasury Secretary Ukur Yatani said in the supplementary budget.
China Road and Bridge Corporation (CRBC) is jointly building the new track with Kenya Railways. The works are set for completion before the end of the year.
This comes on the background of recent clamour by private sector players seeking management of the Naivasha Inland Container Depot as a commercial enterprise to reduce red tape associated with the government.
A study done jointly by the Kenya Private Sector Alliance (Kepsa) and Shippers Council of East Africa (SCEA) noted that clearance of cargo will be much faster if the facility is run like a private entity.
The study proposed that freight charges be halved from the current $ 600 to $300 for 20ft container, and from $800 to $ 400 for 40ft container weighing 20.9 tonnes and below. The charges for 40ft containers weighing above 21 tonnes ought to be reduced from $ 910 to $ 500.
The Kenya International Freight and Warehousing Association (KIFWA) supported the proposal saying high freight costs made it costly to use the Naivasha service for cargo destined to Kampala as it costs Sh303,112 ($2,850) compared to the direct Mombasa-Kampala haulage by truck whose charges currently stand at Sh244,617 ($2,300).
The study found that despite the infrastructural developments and economic advantages presented by the facility, operational and efficiency concerns are reversing the expected gains where players lack access cards as well as a robust online platform.
At inception, KRC dedicated freight trains to haul cargo from Mombasa to Naivasha that were used to ferry on-transit cargo to Naivasha ICD from Mombasa but cargo clearance issues saw fewer shipping lines take up the offer.
Despite opening up the Naivasha inland container depot (ICD) in Kenya to ease pressure on Mombasa Port, many Ugandan shippers have not yet made use of the facility citing high costs.
Government of Kenya allocated Uganda 20 hectares of land to build an inland container port at Naivasha.
“The connectivity is very important and whenever you break the bulk in the middle of the journey, it becomes expensive, because of additional handling costs wasted,” Mr Hussein Kiddedde, the chairman Uganda Freight Forwarders Association (UFFA) told Daily Monitor.
He added that time lost time could range between 12 to 36 hours due to various factors. Legal issues also arise during switching cargo which may have challenges to apportion liabilities correctly.
“It is not a preferred option for Ugandan shippers because of the additional costs as a result of additional handling and the delays,” Kiddedde said.
He added that since most cargo originates from Mombasa and empty containers have to be ferried to Mombasa, they still depend on truckers which is a big cost shifting their fleet from Mombasa to Naivasha.
In June last year, Uganda’s Minister for Works and Transport Gen Edward Katumba in a second letter to his Kenyan counterpart James Macharia indicated that the Naivasha Inland Container Depot did not have the capacity to handle imports intended for trans-shipment to Kampala.
