Kenya to Spend Billions on New City Train Service

The Kenyan Treasury is proposing to allocate a total of Sh2.85 billion in the 2011/12 Budget to the modernisation of the commuter railway services in Nairobi and its environs in an effort to decongest traffic in the city.

According to the budget highlights he released Thursday, Finance Minister Uhuru Kenyatta proposes to allocate Sh3.25 billion for the proposed Mombasa-Malaba standard gauge railway, which is aimed at linking the country with its key trading partner, Uganda, and the East African region.

On the commuter train, Mr Kenyatta expects to set aside Sh1.85 billion to expand and modernise the services in the city and Sh1 billion to upgrade the Thika-Nairobi railway link.

A rail operator is expected to manage the proposed commuter service. Procurement of the operator is going on through an international tender advertised by the Kenya Railway Corporation and InfraCo Ltd (InfraCo Africa), a donor-funded privately managed infrastructure development company.

The project, which will also involve the construction of about seven kilometres of a new track to Jomo Kenyatta International Airport’s Unit 3, and the rehabilitation or construction of stations and other facilities along the network, was allocated Sh1.9 billion in the current 2010/11 budget.

The multi-phased project, whose cost is estimated to hit Sh24 billion once complete, is expected to link the city centre with outlying areas like Thika, Limuru and Athi River/Lukenya.

Conceived in 1992 following a strike by matatu operators, the project began in April 2009, when the corporation signed a joint development agreement with InfraCo.

InfraCo shoulders much of the upfront costs and risks of early stage development, reducing the entry costs of private sector infrastructure developers.