The second phase of the SGR to Naivasha will cost Sh150 billion, which will be financed using a loan from the Exim Bank of China. A further Sh350 billion is expected to be spent in the extension of the railway to Kisumu.
However bilateral trade between Uganda and Kenya indicated that Uganda is planning to partner with Kenya on the SGR project with Kenya offering Uganda land to build a dry port at Naivasha.
Uganda is the biggest market for Kenyan goods and the biggest client to the Port of Mombasa, especially for transit cargo, ahead of Democratic Republic of Congo (DRC), South Sudan and Rwanda.
According to Kenya Ports Authority (KPA) 2017 annual performance report, the port saw a marginal 1.1 per cent increase in transit goods traffic to 7.75 million tonnes.
Uganda remained as the largest of the hinterland market accounting for 81.9 per cent of the traffic or 6.34 million tonnes.
In an official statement President Museveni indicated that Uganda is planning to partner with Kenya on various projects.
“We also look forward to partnering on other projects with our Kenyan brothers. For example, they have offered us land to build a dry port at Naivasha. The SGR is a project we are partnering on,” President Museveni said.
The dry port will also see Uganda play a more crucial role for the hinterland countries, including Rwanda and DRC, and also hints at Kenya’s commitment to come through with the last mile of the SGR railways line between Kisumu and Malaba, which will see Uganda secure funding for its Kampala-Malaba line.
And by dangling the dry-port carrot to Museveni, Mr Kenyatta is telling them that Kenya will offer Kampala independent control of its own goods and any transhipments to DRC and Rwanda, that passes through their territory.