The Kenya Pipeline Company is spending Sh1.8 billion to help rehabilitate the Nairobi-Nanyuki Railway line, which will promote the economies of Mt Kenya and the Northern regions.
The funding is part of the KPC’s remittance to the Exchequer in the form of special dividends.
The final rehabilitation of the 240km Nairobi-Nanyuki railway line lastly used in the late 1990s is gaining momentum with the arrival of train wagons at Nanyuki terminus.
The project expected to unlock Central Kenya region’s economic potential.
To the residents of expansive Central Kenya, the railway line revival means a reduction in transportation of agricultural produce, the revival of industries, creation of jobs and decongestion of the busy Nanyuki-Nairobi highway.
The line cuts through Nairobi-Thika-Maragua- Sagana-Karatina-Nanyuki.
The project is expected to cost Sh25 billion, with the national government paying about Sh3 billion, Kenya Railways, counties and other entities contributing.
“We are here to support Kenya Railways as they complete the rehabilitation of the line from Nairobi to Nanyuki,” KPC managing director Macharia Irungu said.
Kenya Railways expects to generate more than Sh370.4 million per year from the revived 240km line.
The corporation has finalised negotiations on proposed rates with the business community for cargo and passenger trains, with most of the revenue coming from the commercial operations.
Petroleum products being the key cargo, KPC will be charging about Sh82,000 for a single 50-ton fuel tank, with a ton costing Sh1,640.
“Connecting the entire Central Kenya to the railway line will give economic impetus to the region that boasts of over 10 million in population with a combined economy of $40 billion, we are bigger than some countries,” Governor Muriithi observed
Vivo Energy Kenya, which is the anchor client for commercial trains, intends to transport 14 million litres of fuel every month from Nairobi to its depot in Nanyuki.
“Our Nanyuki depot has a capacity of 11.5 million litres. Ferrying fuel via the railway will bridge the supply gap as only five million litres capacity is being utilised,” Genesio Mugo, Vivo’s stakeholder and government relations Manager said.
The commercial trains are expected to generate Sh365 million in revenue.
“In the first year, we will be handling a total of 106,000 tons of fuel, 94,000 tons of conventional cargo and 24,000 head of livestock for the imports category and export goods amounting to 50,000 tons,” Kenya Railways head of commercial operations James Siele said.
Investors ferrying livestock from Laikipia county will be paying Sh730 per ton of cattle and Sh465 per ton of small animals.
Other cargo such as fertiliser, cereals, hardware and farm products among other general cargo will be ferried to and from Nairobi for Sh1,400 per ton.
Investors ferrying imports stocked in Nairobi will pay Sh20,000 per 20-foot equivalent unit (TEU) container from Nairobi to Nanyuki.
A trip from Nairobi to Nanyuki will cost passengers Sh200 and Sh1,000 for the first-class coach.