The new economic imperatives of African railways (3)

Recently built SGRs in Kenya and Ethiopia by Chinese firms have also been slammed for being expensive and economically unsustainable.In fact, most recently, the Kenyan government has had to exercise the option to take over the running of the Mombasa-Nairobi SGR, which has been operating at a loss since its launch in 2017. Hitherto, Kenya’s aged metre gauge railway system carried no more than a tenth of the cargo coming through the Mombasa sea port. Thus, the decision to build the US$3.8bn 472km Mombasa-Nairobi SGR in May 2014 made sense. But since its opening in May 2017, many issues have come up. The Mombasa-Nairobi line is just the first phase, though. Another, a 369 km line from Nairobi to Naivasha, Kisumu and Malaba is planned.

The US$4.5bn 759km Addis Ababa-Djibouti railway is another interesting case in point. Construction cost overruns ran into half a billion dollars, with payments on the US$3.7bn debt coming due more than a year before train operations started in early 2018. The planned full freight capacity is still a long way off. Scheduling is problematic, power cuts are endemic, and the main Addis Ababa terminal is located far out of town (Voros & Tarrosy, 2018). Security risks from the fast-expanding conflict in Ethiopia’s Tigray region has now cast an added layer of concern over the viability of the project. This has prompted China to enter into a security arrangement with the Ethiopian police to protect the railway and its other infrastructure investments in Ethiopia.

Yet, there are new and exciting developments on the development of commuter railways and light rail transit (LRTs) systems in Africa. Suburban rail network was previously unknown in much of SSA except perhaps places such as South Africa and Senegal. North African cities, however, do have a long running love affair with French-style city trams. But modern commuter railways are now coming up all across SSA. Outside of South Africa, however, operations have been hobbled by poor planning and financial constraints. Many such projects therefore still remain on the drawing board or face construction delays.

Read also: The new economic imperatives of African railways (2)

The US$475m Chinese-financed 34.4km Addis-Ababa light railway system, which started operations in 2015, is a much-cited recent example. Hailed at first for its promise of clean and comfortable urban transport, it is now widely seen as an example of what could go wrong. With about 110,000 passengers recorded daily on average (accounting for only 2% of Addis Ababa’s 5 million population) the light railway has fallen short of the primary objective of easing vehicular traffic in Addis Ababa. Overcrowding, power cuts, irregular scheduling, last-mile inadequacies, and limited reach within the city are some of the identified constraints. The financial burden of repaying the loan of the loss-making system is another downside. In a nutshell, the Addis-Ababa LRT has thus far failed to meet its economic and social goals.

18 years after, the construction of the seven-line Lagos light rail project by China Civil Engineering Construction (CCECC) remains ongoing. Still, there are renewed expectations that one or two of the Lagos LRT’s seven lines would become operational in the fourth quarter of 2022.Ground-breaking for the red line of the Lagos rail mass transit (LRMT) project, making two in total of the seven lines currently under construction, was held in April 2021. Financing has been a major constraint. Another is the socio-political costs of constructing the light rail. Property along the route have had to be demolished, with compensation owed previous owners. Managing the politically influential road transportation union, some members of which may be in need of a job should the Lagos LRT succeed, is also a weighing factor. Competition between Lagos state regulatory agencies over jurisdiction was a constraint hitherto as well.

Concerns were also raised about South Africa’s Gautrain project at the outset. Africa’s first high-speed railway, the Gauteng Rapid Rail Integrated Network (“Gautrain”) is an 80km commuter line that links South Africa’s big cities, Johannesburg, Pretoria, Ekurhuleni, and the Oliver Tambo international airport. Critics argue the opportunity cost of building the Gautrain was too high, as it serves the relatively wealthy few members of the population. Unsurprisingly, South Africa’s Automobile Association (AA) voiced its opposition to planned route extensions of the Gautrain on economic grounds in August 2021, more than a decade after it began operations. According to AA, Gautrain passenger traffic, which has underwhelmed projections thus far, do not support an expansion, arguing for more cost-efficient alternatives with greater mass coverage instead.

An edited version of this article was first published by Nanyang Business School’s NTU-SBF Centre for African Studies, Singapore. References, figures and tables are in the original article. See link viz https://www.ntu.edu.sg/cas/news-events/news/details/the-new-economic-imperatives-of-african-railways