The National Treasury has proposed a Sh4.8 billion budget for the Standard Gauge Railway (SGR) ahead of full takeover of the operations and extension of the trains to the border town of Malaba.
Budget documents tabled in Parliament show an initial allocation of Sh2.31 billion to set up an overhaul workshop for the SGR and a further Sh2.2 billion to buy wheelsets for the locomotives.
Kenya Railways Corporation (KRC) will fully take control of the SGR operations from Chinese firm, Afristar by December this year.
The transfer has prompted the need to ensure full operations of the workshops and more logistics hubs given the looming extension of the trains to Kisumu and Malaba.
Overhaul workshops are plants where locomotives, carriages and other parts of the trains are taken for repairs and refurbishment.
“Kenya Railways intends to introduce commercial and logistics hubs in both the metre gauge railway and the standard gauge railway,” KRC said in March.
Additionally, the Treasury has allocated Sh300 million that will be used to complete an overhaul of the passenger ticketing system. Wheelsets act as the interface between the train and the rail infrastructure. They carry the whole weight of rolling stock, ensuring seamless movement, stability, safety and efficiency of trains.
Afristar has been managing the ticketing system, cargo and also collection of fares since 2017. But sky-high operational costs remain a key concern, with the Exchequer providing billions of shillings to fund daily operations of the trains and also pay Afristar.
The complete takeover is meant to contain soaring operational costs that continue to be a major concern for the trains amid heavy reliance on Exchequer support to fund day to day operations.
Past disclosures from Treasury have revealed that taxpayers fork out at least Sh18 billion to foot the operational costs of the SGR annually, expenses that the government is keen to cut by having locals to fully operate and maintain the SGR.
The SGR is also set to be extended from Naivasha to Kisumu and onwards to Malaba, in what will seamlessly link the port of Mombasa to Uganda, easing cargo movement between the two economies and adding to the economic fortunes of the trains.
Extension of the train from Naivasha, to be funded by the governments of Kenya and China and a joint venture of Kenyan and Chinese lenders underscores the need for more logistics centres along the extended line.
Extension of the SGR from Naivasha to the lakeside city of Kisumu is projected to cost Sh380 billion while the last leg from Kisumu to Malaba bordering Uganda will gobble a further Sh122.9 billion.
KRC had taken over at least 90 percent of the SGR operations from Chinese firm, Afristar by July last year. The takeover was earlier planned to be completed by June this year but has since been pushed forward to the end of 2025.
Kenya started a phased takeover of the SGR operations in March 2021 but the Chinese firm demanded that it be paid all outstanding dues before fully handing over the trains to KRC
