Rail as the economic development axis of Africa’s new economy

The Standard Gauge Railway project (SGR) is one of the most important infrastructure development projects in Africa. The SGR will provide a key structure for transport in East Africa, by connecting the Indian Ocean with the interior of Kenya, Uganda, Rwanda, South Sudan and the Democratic Republic of the Congo.

The first stretch of the SGR will connect the Port of Mombasa with Kenya’s capital, Nairobi. It is planned to be operational during the second half of this year. Along with the expansion of the Port of Mombasa, the new rail line constitutes the most important infrastructure investment project in East Africa.

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The SGR is one of the major investment projects currently underway in East Africa

This new infrastructure will provide a major boost in competitiveness for the region in terms of capacity, time reduction, reliability and efficiency of the logistics chain.

Currently, traffic between Mombasa and Nairobi suffers constant delays due to road congestion, particularly in the Mombasa area and in the entry routes to Nairobi. In addition, administrative and customs procedures are exceedingly complex, involving many different agents and the manual handling of documentation. This causes delays and long waits that extend the total time needed for the transit of freight.

Along with the new line, Kenya Railways and the Kenya Ports Authority have built a new rail terminal at the Port of Mombasa, extended the Nairobi container terminal (ICD) and constructed a new railway complex in southern Nairobi (Nairobi South Hub), which will become the Nairobi passenger station for the new line. As well, it is planned that specialised sector clusters will be developed with dedicated intermodal terminals that will provide significant economies of scale.

The project will bring along economic and competitiveness advantages to the region

The strong economic development of Kenya in the last few years will be further enhanced with these new infrastructures—improving the Port of Mombasa’s positioning and greatly extending its hinterland and, at the same time, improving communications and driving economic growth, the development of new businesses and new value-added services.

Advanced Logistics Group ALG

Additionally, the new railway line will involve the creation of a Joint Operating Centre (JOC). This will be an integrated operations centre to coordinate freight traffic to and from the Port of Mombasa, integrating all stakeholders in the logistics chain (shipping companies, carriers, brokers, etc.) and also including government agencies, customs facilities, etc., to ensure efficient freight movement with reduced transit times and logistics costs. In turn this will bring lower production costs and will ultimately boost the country’s economic and commercial development.

ALG has led the project for the definition of an efficient logistics chain between Mombasa and Nairobi. The consultancy assessed the needs for infrastructure facilities and for an integrated development strategy, defining action priorities with regard to operations, pricing policy, marketing and communications, and during 2017 has coordinated the different stakeholders involved in order to launch the commercial services.


About the authors
César Valero Mendoza is a Civil Engineer, holds an MBA, and is a Director at at ALG
Ricard Anguera is MSc in Transport by Imperial College London and Senior Manager at ALG
For more insights, please check www.alg-global.com or contact:
cvalero@alg-global.com
ranguera@alg-global.com