Mar

Railway

Larseng Group > PPP Lapset Projects > Railway

RAILWAY

STANDARD GAUGE RAILWAY LINES
Inter-regional Standard Gauge Railway lines from Lamu to Isiolo, Isiolo to Juba, Isiolo to Addis Ababa, and Nairobi to Isiolo

COST ESTIMATE

Costs for construction of LAPSSET Corridor Railway and procurement of rolling stocks are estimated at approximately USD 7,100 million in total, including civil works USD 3,480, tracks USD 1,200, rolling stock USD 1,220, signal and telecom USD 520, buildings USD 300, and others in million.

ECONOMIC EVALUATION

The Railway has overall Economic Internal Rate of Return (EIRR) of 15.6% for all sections combined. The project is considered feasible from the viewpoint of national economy.

FINANCING PLAN

In consideration of the past experience of failure in concessioning the existing railways in Kenya, government involvement for the initial capital investment for the LAPSSET Corridor railway will be indispensable, because the cost is huge.
Another important fund raising method is to procure funds not only from multi-lateral and bi-lateral sources such as co-financing, but also from the beneficiary countries of the Corridor, i.e. Southern Sudan and Ethiopia.
The PPP scheme could be applied, whereby the private sector participates in management and operation of the railway with adequate expertise and financial capacity based on lease contract of the infrastructure with the government.

Invest in this Project through the PPP Model

CURRENT STATUS

The railway project preliminary designs are complete for the Kenyan and Ethiopian route and expected to proceed to the Detailed Engineering Design stage. The Government Kenya and the Government of Ethiopia have signed a Bilateral Agreement to jointly pursue the development of the LAPSSET Standard Gauge Railway. A Memorandum of Understanding (MoU) has been signed between LCDA and Inter-Governmental Authority on Development (IGAD) to facilitate the financing of this stage though an Infrastructure Project Preparatory Fund (IPPF) available through the New Partnership for African Development (NEPAD).

The Government of Kenya undertook a due diligence exercise between 22^nd and 31^st May, 2016 on the China Civil Engineering Construction Corporation which undertook the feasibility study and detailed design on the LAPSSET Corridor railway line on the Kenyan side. CCECC is the firm that is undertaking the construction of the 756 Km Addis Ababa – Djibouti railway line.