The Nairobi-Nanyuki Railway line refurbished at a cost of Sh25 billion will lead to cheaper and safer fuels in the Mount Kenya and Northern regions, Petroleum Principal Secretary Andrew Kamau has said.
Speaking in Nanyuki during a tour of the line, Kamau said after the pipeline, railway transport comes in second in terms of cost for fuel transportation compared to road and the benefits accrued can be passed to consumers.
“As government we are very excited that with funds that came from KPC (Kenya Pipeline Company), Kenya Railways has been able to execute this project within a few months and we look forward to its commissioning very soon,” said Kamau.
Sh1.8 billion, part of monies used to support rehabilitation of the Meter Gauge Railway came from KPC in form of special dividends remitted to the exchequer.
“I am happy that we already have an anchor client for this rehabilitated line in the name of Vivo Energy Kenya who are ready to utilise the line by ferrying fuel from Nairobi to Nanyuki for easy access to consumers in several counties in this region,” the PS said.
Kamau was accompanied by his transport counterpart Solomon Kitungu who said the line, not utilised for many years, will open up economic opportunities in the region.
“There will also be less accidents on our roads hence saving on lives,” PS Kitungu adding that the rehabilitated line will contribute significantly to the realisation of the government’s Big 4 agenda.
Kenya Railways plans to charge about Sh82,000 for a single 50-tonne of fuel tank with a tonne costing Sh1,640.
Vivo Energy Kenya, which is the anchor client for commercial trains, intends to transport 15 million litres of fuel every month from Nairobi to its depot in Nanyuki.
“Our Nanyuki depot has a capacity of about 12 million litres and ferrying fuel via the railway will bridge the supply gap as only five million litres capacity was being utilised,” Genesio Mugo, Vivo’s stakeholder and government relations manager, said.
Mugo said that with the new line, Vivo Energy will now be moving five million litres of fuel per month with the numbers expected to rise to 15 million litres of fuel per month to serve more than eight counties in the region.
Under the current pump price regime, a litre of petrol in Nanyuki is going for Sh102.41, diesel(Sh98.80) and kerosene(Sh67.37).
In Isiolo, which can easily be served via Nanyuki, a litre of petrol is Sh103.43, diesel(Sh94.82) and kerosene(Sh68.40).
This is way higher than Mombasa which enjoys cheaper prices owing to nearness to the port. A litre of petrol in the coastal town is Sh98.11, diesel (Sh89.50) and kerosene (Sh63.09).
“Kenya Railways, and by extension government, has made it possible for us to remove over 300 trucks of fuel from our roads every month hence saving on our roads,” Mugo said.
Kenya Railways is expecting to generate over Sh370.4 million revenue per year from the revived line.
The corporation has finalised negotiations on proposed rates with the business community for the cargo and passenger trains with the bulk of the revenue coming from the commercial operations.
Laikipia Governor Ndiritu Muriithi said the line will open a new chapter in the region’s economy which he approximated to be about one trillion shillings.