Why electric SGR is a pipe dream
Transport and Infrastructure Cabinet Secretary James Macharia has thrown a spanner in the works, saying that Kenya will not have an electrified rail any time soon.
The CS who was appearing before a parliamentary committee investigating anomalies in the running of the Standard Gauge Railway (SGR) last week said the rail might be upgraded into an electric line, but not in the near future.
Rail to help Kenya achieve higher economic growth
“The power supply that we have in this country is not guaranteed. There are frequent power outages that could derail the running of the trains. We need at least 80 per cent guaranteed supply to even think of upgrading SGR to an electric rail,” CS Macharia told Departmental Committee on Transport members.
“Also, we neither have the finance nor the capacity to support such kind of expensive and sophisticated infrastructure,” he added.
The MPs led by Committee Chairman David Pkosing wanted to know why the country was stuck with running the SGR on diesel while her neighbouring countries were running electric trains.
“We have our neighbour Ethiopia who are running an electric train. Tanzania too is on the same path. We want to be the dominant economy in the region yet we will be ferrying our cargo on Diesel-powered trains, a railway line dwarfed by neighbours we want to be economically superior to,” said Mr Pkosing.
Avoid becoming a victim of Fake News. Subscribe to the Standard Group SMS service by texting ‘NEWS’ to 22840.
CS Macharia said Kenya does not have dependable source of electricity. “As you can see, many companies even around the capital city run on standby generators to cope with supply interruptions.”
The current design of the SGR, built with a Sh324 billion loan granted in 2014 by China’s Exim Bank, comprising a Sh160.6 billion commercial loan and Sh163.4 billion concessional loan, allows the addition of a single electric line.
Kenya currently has a power generation capacity of 2,250MW against a demand of 1,640MW which is enough to power the SGR.
Bernard Oyier, an electrical engineer with a subsidiary of a global power firm company, argues that there is enough electric power in the national grid; the main problem lies with the transmission.
Managers fail to appear before House committee over SGR racism claims
“The Kenya Electricity Transmission Company (Ketraco) has transmission challenges with old equipment and also lacks the expertise to upgrade the SGR into an electric line,” said Mr Oyier.
Ketraco recently announced that it has signed a Sh25 billion commercial agreement with China Electric Power Equipment and Technology Company for electrification of the SGR. And when it comes to the feasibility of SGR – whether electrified or diesel-powered – the Transport committee members had their own doubts.
Committee member Peris Tobiko said the construction of the rail is meant to benefit the elite in the import trade while leaving out the common citizen.
Tobiko’s sentiments were shared by her colleagues who said the rail is underutilised since the cargo trains usually go back to the port of Mombasa from the hinterland empty.
CS Macharia, however, defended the Government’s plan to fully utilise the rail.
“About the under-utilisation of the SGR, we are in talks with the Kenya Private Sector Alliance on how firms can fill those trains. Most specifically, we are in talks with Unilever and the Kenya Tea Development Agency,” said Mr Macharia.
According to figures from the Ministry of Transport, the SGR made a Sh10 billion loss last year.
The trains only ferried 990,488 tonnes of cargo, with the CS explaining that: “Part of the reason we made the loss last year was that it was a bit difficult to convince people that the railway was good for their cargo businesses.”
Kenya projects that SGR expects to haul at least nine million tonnes of cargo this year, in order to turn in a profit of Sh5.08 billion.
CS Macharia said if the SGR does not break even by the 2019/2020 financial year – when the loan repayment to the Chinese government matures – then the exchequer will have to pay from the railway levy.