Investors to Run SGR Trains, Factors Behind Fuel Hike

Hello and welcome to the Money Weekly Newsletter, where we cover the latest government plan to allow private investors to run and operate SGR trains.

But first, a word from our sponsoring partner, Umba Microfinance Bank.

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The government is planning to allow private investors (or a consortium) to run and operate passenger and freight train services along the Nakuru-Kisumu-Malaba Standard Gauge Railway line, whose plan for extension is already in the works.

According to Transport Cabinet Secretary Davis Chirchir, the new plan will make the project viable and suitable, given the losses witnessed in the first phase of the project (Mombasa to Nairobi).

In the new model being considered, the government will be responsible for undertaking the development of the infrastructure, such as the railway line and the stations.

Afterward, the government will grant an investor permission to operate along the line at a fee.

"We have a framework where we are seeking to commercialise aspects (of the project) which are profitable,” the CS stated.

“So with that investment of $5 billion, we will be looking to reduce the portion that would otherwise go to freight: buying the engines, buying the bogies and the rolling stock.”

The extension of SGR is set to commence in the coming months, given that the government has already secured a financing deal during President William Ruto's trip to China.

The project extension is estimated to cost Ksh648 billion. From the plans, the Kenyan SGR will be linked with the Ugandan line that will run from the Malaba border to Kampala.

Uganda already secured Ksh104 billion from the Islamic Development Bank (IsDB) in May this year.

Here is a quick recap of the top money news for the week:

Fuel Prices & Moneylandering

• On Wednesday, the government confirmed using the Ksh7 increased fuel levy as security to take up loans. The government is aiming to take up a Ksh175 billion loan using the fuel levy as security. The government has already received Ksh60 billion. Read here for the full coverage.

• The Financial Reporting Centre has published new regulations that will require Kenyans purchasing homes above Ksh1.9 million from real estate agents to reveal their identity. This move is expected to tighten Kenya's fight against money laundering.

Catch Up on More News

WEEKLY MONEY TIPS

MONEY254 #MONEYTOK

Private Investors to Own & Run SGR Trains Under New Govt Plan

For the first time, private investors will be allowed to own and operate trains on the SGR. They'll buy and run the trains for profit, while the government maintains the tracks and stations for a fee.

The move is part of a plan to make SGR operations more sustainable, with the full route to Malaba expected by 2027. This model mirrors what’s used in the UK and could boost regional growth.

@money254hq

𝐏𝐫𝐢𝐯𝐚𝐭𝐞 𝐈𝐧𝐯𝐞𝐬𝐭𝐨𝐫𝐬 𝐭𝐨 𝐎𝐰𝐧 & 𝐑𝐮𝐧 𝐒𝐆𝐑 𝐓𝐫𝐚𝐢𝐧𝐬 𝐔𝐧𝐝𝐞𝐫 𝐍𝐞𝐰 𝐆𝐨𝐯𝐭 𝐏𝐥𝐚𝐧 For the first time, private investors will be allowed to own and operate tra... See more

That’s a wrap for this week’s Money Weekly!

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