In Summary
  • Mr Macharia and Mr Odinga said the approach to the SGR funding has changed but the project is still on.
  • Among the new projects is a special economic zone to be established in Muhoroni.
  • Sh700 million will be used to repair the Naivasha-Kisumu railway stretch.

Kenya will not rely on foreign funding to finance the multi-billion-shilling standard gauge railway (SGR) extension from Naivasha to Kisumu, the government now says.

The government has said it is considering alternative projects in the lakeside region, which it will use to generate funds to be used to finance the ambitious railway project.

The revelations were made during a tour Monday, led by ODM leader Raila Odinga, of various projects the government has earmarked for Kisumu's economic transformation.

Mr Odinga is the African Union Special Envoy for Infrastructural Development.


While maintaining that Kenya has not abandoned the SGR project to Kisumu, Transport Cabinet Secretary James Macharia and Mr Odinga said the approach to the SGR funding has changed but the project is still on.

The move signals the government’s shift from initial plans to borrow Sh368 billion from Export-Import (Exim) Bank of China even as it has emerged that the Asian giant is reluctant to fund the project.

The key infrastructure projects whose success the government is banking on to revive the SGR dream include the port, Kenya Pipeline Company’s oil jetty and the special economic zone whose location was identified on Monday at Kango, in Ombeyi Ward, Muhoroni Sub-County.

The projects, which are on strict deadlines, are set to commence immediately as instructed by President Uhuru Kenyatta.


They are to be launched officially in August by President Kenyatta, his Uganda’s Yoweri Museveni and DR Congo’s Felix Tshisekedi.

Speaking for the first time on the SGR trip to China, Mr Raila Odinga denied claims that Kenya was denied a loan, indicating that the government has changed its approach and priorities in terms of sequencing of projects.

“There have been misleading reports in the media on our mission to China yet we only changed the sequencing of our projects,” said Mr Odinga.

“We never failed in China. It is just a matter of sequencing and the SGR is going to come to Kisumu through Malaba to Kampala,” he said.

He said the multi-billion industrial park to be set up in Muhoroni is what the people of Kisumu County will get as it lays foundation for the coming of SGR that will terminate at the port.


His sentiments were echoed by Mr Macharia who insisted that the government has not abandoned the construction of the SGR line to Kisumu.

The CS said the development initiatives being rolled out in the region are key to ensuring the SGR line is busy once it reaches Kisumu.

“We have not abandoned the project. What we are doing is rehabilitating the meter gauge railway line from Naivasha to Malaba to ferry goods to Uganda,” he said.

Mr Odinga and Mr Munya said they have decided to prioritise industrialization in Kisumu starting with a 500-acre special economic zone which is expected to employ about 25,000 Kisumu residents.


Mr Munya said after identifying the parcel of land, his technical team will complete their job to ensure the industrial park is accessible through building of roads, provision of electricity and pumping of water to the proposed location and its environs.

Mr Odinga the plan now is to revive economic activities in the area which used to depend entirely on sugarcane farming which is now dogged with challenges.

“We are trying to diversify and that is why we are bringing big industries which will use local raw materials and employ thousands of youth from this region and generate funds,” said the ODM leader.


The move by government to fund its own projects also come as a relief to Kenyans who have raised concerns over the appetite for foreign loans.

By 2018, Kenya’s public debt stood at approximately Sh4.8 trillion.

Mr Macharia said the rehabilitation of 120-year-old Naivasha-Malaba metre gauge railway will yield profits which will finance the Kisumu SGR project.

“We are sure that revamping the old line will be a profitable venture which can help the country maintain the trade between Kenya and Uganda, our biggest trading partner,” he said in Kisumu on Monday.

“We do not want to experience hiccups in terms of trading and the revenue earned will help the government to sustain itself and fund the SGR mega project,” added Mr Macharia.


Due to the abandonment of the Naivasha-Kisumu old line, the CS noted that it will require a whooping Sh700 million to repair the stretch which was last used 17 years ago.

“The reality is that the Nakuru-Kisumu line is not in good shape; it has 17 bridges which have been vandalised and it may require doing a new line altogether,” he said.

“But this does not mean that we will not construct the Kisumu SGR as earlier planned,” added the CS.

The Transport ministry has also unveiled plans to construct a Sh14 billion port at the lake side town which is part of the SGR infrastructure drive.

Already, Sh500 million has been allocated in the current financial year while an additional Sh2.5 billion will be disbursed in the next one to kick-start operations at the inland port.


“We want to ensure that we bring back the glory and have a beehive of activities as we aim to have heavy ships dock and offload goods where the SGR line will terminate,” he said.

The revamping of the port, which was established in 1901, will also see the completion of the dry port by the end of July.

The facility is used for repairs and certification of ships before they are released to operate in Lake Victoria.

On the other hand, Mr Munyes indicated that the Sh1.9 billion oil jetty which is to be commissioned in the next two months will pay back the investment in four to five years.

“We are just waiting for our neighbour (Uganda) to give us a thumbs up for us to roll out the project which is expected to save the country millions of shillings as well as safeguard our roads from damages,” he said.