The Chinese company that will operate business on the standard gauge railway has committed to employ up to 3,000 Kenyans when it starts commercial operations in January 2018.
The firm will employ drivers, technicians and station operators, offering employment to those laid off by Kenya Railways when it transferred rail operation to Rift Valley Railway (RVR).
Transport principal secretary Irungu Nyakera told MPs on Monday that the operator will start hiring between 2,000 and 3,000 Kenyans after February when the government expects to ink an operation deal with the firm.
Kenya gave China another sweetheart deal through contracting a Chinese company to operate business on the SGR without public bidding.
RVR, which operates the Kenya-Uganda railway, is expected to face competition from the new railway being built with Chinese financing from Mombasa to the Ugandan border.
“They directed that the contractors for the Mombasa-Kampala section undertake operations in the interim as the two partner states build their local capacities,” read an agreement signed at the summit of East African Community heads of state.
Kenya Railways expects the tracks for the Mombasa to Nairobi line to be ready next year and the rail opened for commercial traffic in January 2018. RVR, which operates the ageing narrow-gauge track, will be the biggest loser.
RVR has recently raised billions of shillings from banks and shareholders to buy locomotives and wagons and refurbish the rail in a bid to move more traffic from roads to railway.
Rail transport in Kenya accounts for only 1.5 million tonnes of the 24.8 million tonnes of cargo that pass through Mombasa port to the region every year.
Government officials say that the poor performance of RVR has led to contracting of a Chinese firm to operate the rail business.
RVR won a 25-year contract to manage cargo business on the 2,352km Kenya-Uganda railway and a five-year contract for the passenger unit in November 2006.
Egypt’s Citadel Capital owns 85 percent of RVR while Uganda’s Bomi Holdings owns the rest.
China Communications Construction Company is in pole position to be the operator of the new railway, government sources said.
The new line will ferry heavier and bigger containers faster and will ease pressure on the region’s congested roads, improving Kenya’s competitiveness as an investment destination.
The goal of the rail project is to cut the cost of transport and boost trade by replacing a narrow-gauge line that has slower top speeds.
It will cut the journey between Nairobi and Mombasa to four and a half hours from 13 hours or more currently and reduce freight costs to 8 U.S. cents (Sh8.14) per tonne per kilometre from the present average of 20 U.S. cents (Sh20.37).