Monday, 17 April 2017

Kenya's is the cheapest SGR in East Africa

Mombasa Super Bridge on Kenya's SGR
 KENYA'S STANDARD GAUGE RAILWAY  is the cheapest in East Africa, we can report. It cost US$4.43 million per kilometre  while Ethiopia spend $5 million, Eritrea $ 5.05 and Tanzania's central Corridor will cost $5 million  for the same length.

This is despite the fact they are upgrades on existing lines and  are of inferior quality to Northern Corridor SGR.

 Whispers have it that, the central Corridor is a carbon copy of the Ethiopia-Djibouti line in that the scope of works include upgrading the one-Meter gauge Railway line to 1.435 meter gauge and electrification at25 kV.   Going by the costs in Ethiopia and Djibouti,  upgrading a kilometer will cost Tanzania some US$5.0 million.
We will ignore the nagging question whether Tanzania can generate enough power to run a train.

 Already, the 300 Km  Dar- Morogoro section, whose construction the President launched last week, will cost a whopping $1.215 billion according to Tanzania’s Daily News. That works out to $4.05 million per Kilometer and that excludes land compensation and electrification.
A Double stacked Train
 These new figures put paid to the allegation the Kenyan, SGR, though a green field project, is the most expensive in East Africa.  The numbers also answer the  the critical” question: Just what is the difference between the Northern Corridor Standard Gauge Railway and the other two in east Africa?  If the numbers here are anything to go by, then myth that, the Northern Corridor SGR is expensive is debunked. Kenya’s green field SGR is the cheapest in the region at $4.43 million per Kilometer.  
 The Debate about the three SGR lines centre on cost leaving out other factors at play in the costing of any SGR line.  The Northern Corridor SGR, say critics, is the most expensive in east Africa and therefore some fellows in power must have pocketed a large chunk of the money through rent seeking, the conclude.
This is simplistic.  The two are incomparable because they are different and their costs also differ.  
Here are the differences:  the Northern Corridor is Class one Chinese standard line. This means that it is sturdier and can carry more weight. The Central Corridor and the Ethiopian –Djibouti Line are class two Chinese standard, meaning they carry less weight.
An Embankment on Kenya's SGR
 The second difference, the Northern Corridor is built on rugged terrain with peaks and dips while the other two are on a relatively flat terrain. Therefore the Northern Corridor Railway line, which is the busiest Corridor in the region, must have embankments, tunnels and viaducts to keep the line as flat as possible

The third and critical difference is: The northern Corridor SGR is green field while the other two are upgrades of old railway lines. The 752.7km Ethiopia-Djibouti railway is an upgrade of the metre-gauge line to a 1,435mm gauge line, and electrification at 25kV.

It seems that the cost of upgrading a kilometre including installing electric lines is a standard US$ 5 million. Here, the contractor has to ensure that a lot of engineering facets such Viaducts, tunnels and  embankments are minimized or eliminated. Where they cannot be avoided, they should be as short as possible. Cutting costs is the leading determinant.
A Tunnel

The Cost per Kilometre for a green field project does not appear standardized given the peculiar circumstances of each region and country. Further such engineering instruments as viaducts, Embankments and tunnels are not avoided or minimized. Here the smooth run of the train is a major determinant.

 These findings debunk the myth by some analysts of questionable integrity that the “Lunatic Express” which runs from Mombasa to Kampala, could be upgraded at US$200 million.

The known expenditure on these three lines thus explodes myth that Norther Corridor is expensive. In fact, the northern corridor, even as a green field project is more than $50,000 cheaper per Kilometre than the upgraded ones.

According to an investor Brief prepared for the Rwanda Government, the scope of works of the $7.6 billion Tanzanian line will include upgrading the 960 Km Dar-Es-salaam- Isaka section to standard gauge-“keeping to the existing alignment as much as possible.”

  This, analysts say, is likely to be extended to Mwanza which will mean that the upgrade will involve 1,219 KM. Tanzania will build just about 320 kilometres of green field Standard Gauge Railway between Isaka and Keza on the border with Rwanda.

Kenya’s SGR between Nairobi and Mombasa cost $2.66 billion or $4.43 million a kilometre. If the cost of the $1.44 billion contract for the supply of Locomotives and rolling stock namely; 56 Locomotives, 40 passenger coaches, 1620 wagons, the Mombasa –Nairobi section, which is 600 kilometres of railway plus the locomotives and rolling stock cost $4.1 billion.

On the second score that of carrying capacity, the class two Chinese standard line is beaten hands down.  The wagons axle load capacity is 25 tons maximum while the Northern Corridor SGR has 25 tons as the minimum axle load capacity.

Therefore the Norther Corridor line can carry more freight than the upgrade one-meter gauge lines.  Consequently wagons are double stack wagons that can carry two containers stacked one on top of the other. The wagons on the northern corridor will carry more freight per trip than the other two. In fact, 56 double stack wagons will haul 4,000 tons, what 130 trucks carry.

 On the other hand, the Ethiopian line’s only publicly recorded haulage is nearly 1, 200 tons of relief food in 2015.  That is nearly a quarter of what will be hauled on the northern corridor in a single run.

Yet,  on this simplistic analysis that the Tanzanian President, John Magufuli, according to Uganda’s Daily Monitor Newspaper, attempted to woe Uganda’s Yoweri Museveni, to discard the Northern Corridor in favour of the Central Corridor. This sounds like a pipe dream.

Here’s why; Tanzania is inviting Uganda to abandon its SGR ambitions and all its potential benefits to rely on Tanzania instead!  That is like transferring one’s inheritance to a neighbour’s children.  Uganda is being asked to retain its archaic 19th century railway line so that Tanzania’s SGR can remain profitable! According to the Investor Briefing referred to earlier, Tanzania can only generate 3.1 million tons of freight for a line designed to carry 1aA7 million tons a year.

 If Uganda falls for the trick, it will have to abandon its 1617 Km network which is projected to save the country US$2 billion a year in freight costs and also abandon the Uganda- South Sudan Line thus hurting its business interests in South Sudan. The entire 1617Km of the Uganda section of the SGR will cost an estimated $12.8 billion, says Uganda’s Daily Monitor while the Kenyan side will cost an estimated $11.4 billion, it says.

 A Railway line opens up opportunities in a country; creating new business opportunities for people neighbouring the line, easing the cost of transport and improving on the transit time. In effect, a railway line has direct links with the local economy.

Consequently, Uganda will be transferring her potential benefits to Tanzania if she abandons her SGR as she will have to ship her imports and exports through Tanzanian Ports.  The nearest port would be Mwanza, eight hours journey away across Lake Victoria.
Marine transport across Lake Victoria collapsed more than a decade ago, says the Monitor in another report. It will thus need massive investment in infrastructure, Marine Vessels and other equipment to meet demands of a modern high speed railway. Short of this, Marine transport across Lake Victoria will become a bottleneck to Uganda’s international trade.

 The journey across the Lake could take more than 8 hours of travel assuming seamless transfer of the freight. 
This compares negatively to the two hours by high speed train from Malaba to Kampala.  This section is 273 Kilometres long and, according to reports, will cost $2.3 billion. This works out to an average cost of US$8.5 billion which includes the cost of locomotives and rolling stock at US$180 million. One wonders how many locos, freight wagons and passenger coaches this money can buy.

 The East African report quotes Uganda Officials as saying that the Malaba- Kampala section will be 339KM of rail and that its costs  includes the cost of building a polytechnic in Tororo, eastern Uganda for $30 million, staff facilities for $25 million and spend $20 million to improve the Kampala railway station.

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