Logistics Business News

Museveni visit puts Northern Corridor plan back on track
The East African dream of achieving a seamless Northern Corridor transport network is back on course after Uganda agreed to start construction of the Standard Gauge Railway (SGR) from Malaba to Kampala after years of uncertainties. Kenya was considering terminating its section of the SGR line at Kisumu should Uganda, which had indicated that it would build its line to connect to Tanzania, stuck to its guns. SGR is part of the Northern Corridor transport network, which connects the Port of Mombasa to the neighbouring landlocked countries of Uganda, Rwanda, Burundi and South Sudan. President Yoweri Museveni’s move comes as a boost to Kenya, whose financing prospects for the second phase had apparently been pegged on Uganda agreeing to put up a line from Malaba to Kampala. Kenya is now certain of extending the facility to the Ugandan border following the commitment by President Museveni that his country will construct a line to Kampala. “We have had great progress on these discussions. It will be a game-changer, especially for movement of cargo from Mombasa to Kampala,” said President Museveni. The Ugandan president made the remarks last week during his three-day state visit in Kenya where he toured various infrastructure projects in Mombasa and rode the SGR train from the port city to Nairobi. The Ugandan announcement coincided with the visit by a Kenyan delegation to Beijing to negotiate funding for the second phase of the SGR. The high-powered delegation, comprising officials from the Treasury, Kenya Railways Corporation, Ministry of Transport and State Law Office, left for the Chinese capital last Friday. The Kenya Railways Corporation (KRC) owes the Exim Bank of China Sh227 billion that was used in the construction of the SGR between Mombasa and Nairobi. There have been fears recently that the Chinese might auction the Port of Mombasa if the government defaults on repayment. A report by Auditor-General Edward Ouko states that the payment agreement substantively means the revenue of the Kenya Ports Authority would be used to clear the debt. Kampala had last year announced the suspension of SGR and turned its attention to revamping the old metre-gauge railway network until unresolved issues with Kenya and China had been concluded, Ugandan Finance minister Matia Kasaija had said then. “It is apparent the SGR is going to take us a lot of time to complete. First, we have to wait for Kenya to reach the Malaba [border] point then we can start,” Mr Kasaija told the Daily Monitor last year October. Uganda’s first phase of SGR, the eastern line running from Malaba to Kampala, about 273km (338km rail length), is expected to cost $2.3 billion. The entire SGR, to cover the whole country, is expected to a cost $12.8 billion. The Uganda government has been in constant back and forth engagements with Beijing to release the first tranche of funding for the eastern line, particularly with prospects of paying back when oil revenues start flowing in 2020. Great Lakes When Uganda and Rwanda had announced that they would construct their SGR heading to Tanzania, Transport cabinet Secretary James Macharia told Shipping then that Kenya would have an option of ending the line at Kisumu, then use the state of the art port that is being constructed on Lake Victoria to supply cargo to the Great Lakes countries. Kisumu Port is estimated to cost about Sh14 billion, and the Treasury will need to secure about Sh350 billion for the Naivasha-Kisumu section. Rwanda and other countries along the corridor had an agreement in 2013 to link up the port of Mombasa using the SGR and each country is required to construct their own section. Only Kenya has so far made significant progress in the construction of its line, with Mombasa-Nairobi section completed, while Uganda and Rwanda are still discussing the financial deals. Kenya secured a Sh150 billion loan from China to extend the railway line from Nairobi to Naivasha after last year’s completion of the Mombasa-Nairobi section. It is estimated that more than 50 per cent of the cargo handled at the Port of Mombasa is destined for markets such as Uganda, with 11.2 million tonnes of cargo moved between the two nations annually. SGR has seen a significant share of the road cargo from Mombasa to Nairobi shift to the train as the government has made it mandatory for transporters to use the rail.   Source : https://www.businessdailyafrica.com/corporate/shipping/Museveni-Northern-Corridor-plan-back-on-track/4003122-5053754-iryefg/index.html
Private firm to fund Sh21bn old rail link to SGR
Private contractors will finance the upgrade of the old metre gauge railway (MGR) between Naivasha and the Malaba border and also+ build a new line connecting to the Standard Gauge Railway (SGR) at a total estimated cost of Sh21 billion, Transport Secretary James Macharia has said. The public-private-partnership contract will help the government to avoid borrowing more loans while ensuring that there is a reliable railway connection between Naivasha and the Ugandan border for onward connection to Kampala. Kenya dropped its bid to extend the SGR to Kisumu and later on to the Ugandan border after failing to secure a multi-billion-shilling loan from China, which funded the first and second phases of the new railway line. Mr Macharia Wednesday said the government’s priority now is to upgrade the old metre gauge railway and connect it to the SGR through construction of a new road and rail link from Maai Mahiu to the Naivasha MGR station. Upgrading the old Naivasha-Nakuru-Eldoret-Malaba line will cost an estimated Sh15 billion ($150 million) while building of the Mai Mahiu connection will cost about Sh6 billion ($60 million). The upgrade and construction of the connection is expected to start in the next three months. Private sector “Private sector would be much faster because you know it is the financing agreements that take longer but if you have ready funding from the private sector then we just engage them within our existing Public Private Partnership arrangements. We concluded the deal for the expressway from Mombasa in two months so it is possible,” said Mr Macharia Wednesday. Transporters will truck cargo through the Maai Mahiu–Narok road to the Naivasha MGR station before completion of the 43-kilometre railway line between the old and the new railway stations. The upgrade and construction of the connection is expected to start by about August, in time for the planned launch of the Nairobi-Naivasha SGR line. Mr Macharia made the announcement yesterday after hosting a delegation from Uganda led by the minister for Works and Transport, Monica Azuba. There has been concerns that the Mombasa to Naivasha SGR, which cost an estimated Sh477 billion, would not be economically viable if it is not connected to Kampala which is a major user of the Mombasa Port for its imports. Uganda team The Ugandan team whose trip is a follow up to the March 2019 visit by President Yoweri Museveni – during which the SGR talks took centre-stage -- expressed concern over a possible rise in transport costs should the trucking between the two railways lines last for long. “There is that gap but I hope we will work out modalities to see that our transporters would not get disadvantaged both in terms of cost and time in trans-shipping between the metre gauge railway so that it is a win-win situation for both of us,” said Ms Azuba. Mr Macharia later told the Business Daily that the link to the MGR will result in time savings for Uganda-bound cargo, hence will compensate for any cost increases that may result from the trucking. He said the government will engage Uganda to address possible cost implications by offering discounts should there be need to do so. The Narok road will also have to be upgraded to allow for the many trucks between the old and the new railway, pending construction of the new railway link which is expected to take more than one year. The CS who last week said both the Nakuru–Malaba and Nakuru-Kisumu MGR lines would be revamped, Wednesday said upgrade of the old Kisumu line may not be viable after all. Several bridges According to him, the line has ‘several bridges that are vandalised’ and may turn out to be a costly affair considering that the government still has plans to complete the SGR line to Kisumu where the port is to be also upgraded. Uganda is also said to be working on the reconstruction of the Metre Gauge Railway line from Malaba to Kampala with funding from the European Union. The upgrades for the two lines, Malaba-Kampala and Tororo-Gulu, will cost the country some Sh18 billion. Kenya already offered to give Uganda land to construct an inland depot in Naivasha, a key mission for the delegation currently visiting the country. The renewed focus on the metre gauge railway line now dims hopes for the fast-tracking of the Chinese-funded SGR which was expected to reach Kisumu by 2022 and link to a sea port for shipping of cargo to Uganda. Focus on private sector funding by the government presents a shift on mega infrastructure funding which has been blamed for the ballooning debt pile for Kenya. Last month, a Kenyan delegation in Beijing attending the Belt and Road Forum returned empty-handed after it emerged that plans to secure the billions needed to complete the SGR to Kisumu had hit a deadlock.     Source : https://www.businessdailyafrica.com/news/Private-firm-to-fund-Sh21bn-old-rail-link-to-SGR/539546-5107188-92jqqaz/index.html
First upgrades to Mexico City airport will bring it into the modern age
The 1st stage of modernization of the Mexico City International Airport (AICM) will be finished before the end of 2019, according to Communications and Transportation Secretary Javier Jiménez Espriú. Jiménez told the local newspaper Milenio that the improvements will bring the AICM into a modern age, where it will join airports like those of Cancún and Guadalajara. The improvements have a budget of US $156 million and include addressing sinking at Terminal 2. They also include modernizing runways, remodeling washrooms and building new waiting rooms, etc. Jiménez said that work will began soon on a third terminal, which will be located in the former presidential and air force hangars. Finally, he added that the public consultations for the constructions of the new Santa Lucía airport will begin soon.   Source:https://www.milenio.com/
Facilitation, logistics of trade may get separate department
The commerce and industry ministry has proposed creation of a separate department for trade facilitation and logistics for better coordination among different government agencies.  In its 100-day agenda for the new government, the ministry said, “Economic Advisory Council to the Prime Minister (PMEAC) has also recommended the same. This will lead to better coordination.”  At present, the logistics division in the Department of Commerce is mandated to develop an action plan for the logistics sector in the country, by way of policy changes, improvement in existing procedures, identification of bottlenecks and gaps, and introduction of technology. However, there is no single department to look at all the aspects related to logistics covering various modes of shipment such as sea, roads and railways.  India’s logistics and transportation costs are pegged at at 14.4% of the gross domestic product, much higher than China’s 8%.  In January, the PMEAC had suggested setting up of a separate logistics department to boost the transport sector and to improve ease of doing business.  The 10-point action plan has also proposed rolling out policies on national and multi-modal logistics, integrated national logistics action plan, and logistics planning and performance management tool.  As per the plan, a Multi-Modal Transportation of Goods (MMTG) Bill will be introduced in Parliament to replace the existing MMTG Act, 1993. The new bill would introduce concepts such as regulation of self-regulatory agencies and facilitation of smooth movement of products for both domestic consumption and foreign trade     Source : https://economictimes.indiatimes.com/topic/logistics-industry
Aeromexico ranked #3 for punctuality, service and claim processing
Mexican flag carrier Aeromexico has been ranked 3rd in the world by AirHelp, an online platform that helps air passengers get compensation from airlines when their flights are canceled, delayed or overbooked. The AirHelp Score 2019 ranking of global airlines is based on three factors: on-time performance, service quality and claim processing. Aeromexico ranked 3rd behind Qatar Airlines and American Airlines, obtaining an overall score of 8.1 points out of 10. Broken down, that score shows that the airline obtained 7.8 points in on-time performance, 8.4 in service quality and 8 in claim processing. Government data showed that Aeroméxico’s on-time performance rate was 91.1%. Aeroméxico was the only Mexican airline among the 72 whose performance was measured   Source:https://mexiconewsdaily.com/