How power system loss inflates your bill

Utility firm Kenya Power loses up to Sh10 billion annually through system losses during transmission and distribution of electricity to consumers, People Daily can reveal. The amount, which is equivalent to Sh10.9 billion profi t before tax posted by the fi rm last year, reveals how system losses chop off a considerable chunk of revenue, …

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From Mombasa to Malaba on modern railway

The Standard Gauge Railway Athi River Terminus.  Photo/AYUB MUIYORO

The standard gauge railway (SGR)starts on the shores of Indian Ocean and runs along the Northern corridor through Nairobi and Kisumu City. It is expected to finally snake into the border town of Malaba, before proceeding to Uganda and Rwanda in a bid to ease movement of goods and congestion on main highways.

Between Mombasa and Malaba, the SGR covers some 900 kilometres, along which there will be two main freight exchange and passenger stations in Mombasa and Nairobi. Due to its size, the project is being executed in bits with the first phase set to traverse Kwale, Taita Taveta, Makueni, Machakos and Kajiado in a 472 kilometres stretch.

This will directly impact on business and lifestyle of major hubs including Voi, Tsavo National Park, Mtito Andei, Sultan Hamud and Emali as the railway line snakes into Syokimau.

As part of the project, the government decided to have the Embakasi Inland Container depot (ICD) expanded to accommodate the expected cargo inflows. Also approved for expansion and modernisation is the Embakasi ICD and the ports at Kisumu and Malaba.

Scope of works for the Mombasa to Nairobi section was fronted under an engineering, procurement and construction type of arrangement which entails construction of a single line with a total track length of 609 kilometres over the stretch of 472 kilometres with 33 crossing stations.

The second phase, strategically intends to take the railway closer to the Uganda border and accelerate regional connectivity, was initially planned for Malaba, but the termination point has changed to Kisumu on Lake Victoria amid moves to extend it to Malaba.

Naivasha town will be the next stop from Nairobi as plans to seamlessly link beach and safari tourism in the country takes centre stage. Known as 2A, the second phase of the project makes a proposed industrial park in Naivasha a key cog of the project.

The proposed Industrial Park, complete with social amenities and other commercial investments, will be located to the South of Lake Naivasha near KenGen’s geothermal fields, is major attraction.

Kenya Railways Corporation has already entered into a commercial agreement with the main contractor, China Road and Bridge Corporation in the presence of President Uhuru.

Additional Sh360 billion from China, to extend SGR from Naivasha to Kisumu before proceeding to Malaba, has already been secured. A recent visit to China prompted President Uhuru to engage Uganda’s Yoweri Museveni and Rwanda’s Paul Kagame on possibility of the two countries extending the railway into Uganda before going into Kigali.

The three countries are expected to soon send a joint team to Beijing for more funds so that the SGR can reach Malaba before proceeding to Kampala and then Kigali.

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SGR tops other mega infrastructure projects

The Standard Gauge Railway passenger train ride comes to a stop at the Mombasa Terminus. The SGR tops the list of major infrastructure developments the government is leveraging on to drive growth. Photo/AYUB MUIYORO

The Mombasa-Malaba standard gauge railway (SGR) tops the list of major infrastructure developments the government is leveraging on to ensure a robust micro-economic environment drives growth.

The investment, comparable to 13 per cent of the Sh2.6 trillion 2016/17 budget, will help integrate domestic markets, link special industrial zones in the country and help bring global export markets closer home.

It is part of ongoing implementation of mega-infrastructure and energy flagship projects under Kenya’s Vision 2030. The projects, mostly in transport, energy, water, sanitation and health sectors, have gobbled trillions of shillings both directly and indirectly.

Strategically positioned to leverage on SGR is the Lamu Port Southern Sudan-Ethiopia Transport corridor which will cost upwards Sh4 trillion. Over 100 consortium have already expressed interest to come on board while financiers and contractors for various projects have been identified in what is expected to generate over 400,000 jobs.

Amid increased population, the $50 million (Sh500 billion) Mombasa Port Development Project, partly financed by Japan, will boost traffic capacity of the coastal city of Mombasa, which is becoming a major bottleneck especially at connecting points between the island and mainland.

Ongoing construction of feeder roads and highways is also expected to ease congestion and enhance connectivity. This includes improvement of Port Reitz and Moi International Airport access roads and the dualling of the Mombasa–Mariakani highway.

In the heart of the part of the ambitious projects is the Mwatate–Taveta road as well as the multinational weighbridge station at Mariakani. The Kenya National Highways Authority is also constructing the Dongo Kundu Bypass as part of the new Mombasa Port Area Road Development Project.

Kenya has recently had a robust energy sector and the 2016 Africa Construction Trends Report estimated over 11 ongoing projects valued at Sh727.98 billion in the country. Kenya emerged with the highest number of mega infrastructure projects in East Africa in 2016, Deloitte said in the report.

Among these projects are ongoing investments in Geothermal in Nakuru County and the ambitious wind power in Marsabit. The Sh70 billion Lake Turkana Wind Power project is a 438km transmission line currently being constructed in conjunction with Kenya Electricity Transmission Company who are evacuating electricity from the 40,000-acre wind farm to the national grid via Suswa substation.

Targeting a million homes, the double circuit 400kV wind farm plans annual generation capacity of 1.6 billion kilowatt hour. Kenya’s economic growth has spurred excitement in retail, entertainment and shifts in lifestyles Apart from one-off projects like the multi-million projects in Upper Hill such as the 70 storey Pinnacle, Tatu City in Kiambu stands tall.

Sitting on 5,000-acre, the mixed-use development with homes, schools, offices, a shopping district, medical clinics, a sports complex and manufacturing area for more than 150,000 residents.

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Inside high seas wheel, deal secrets

Shipping business is driven by shrewd traders. Photo/AFP

The laid back global shipping business has been on the spotlight amid intrigues surrounding maize imports by the government to address flour shortages biting the country.

At the heart of the public debate, which took a political turn, is the ‘record’ speed at which a vessel from Mexico port docked at the Mombasa port with 30,000 tonnes of the grain.

Government officials were accused of playing into the hands of maize cartels or working in cahoots with them. Merchants well versed with the grain business say leveraging on commodity exchange concept, the multibillion business uses huge vessels and dock at places with close proximity to their target markets.

For Kenya, the Durban Harbour in South Africa, which is the largest and busiest shipping terminal in sub-Saharan Africa or Alexandria, Port Said or Damietta on the Mediterranean in Egypt are the closest.

The trade also leverages on chartered ships that offer rented space to importers and exporters along various routes determined by demand and supply of various commodities.

According to OpenSea, a ship chartering marketplace that helps match ship and cargo online, there are many platforms that track ship owners and cargo movers and immediately links them according to the location of the cargo, vessel’s route and the two parties discuss cost and delivery procedures — sometimes on the high seas.

In the case of the ‘Mexico’ maize, the government clarified the maize had been procured by South Africa during a drought last year and excess grains had been stored at the Port of Durban. This business that cuts across the globe is determined by observing balances and imbalances within the global supply and demand chains and shrewd traders placing bets on rising and falling market demands to make profits.

Merchants familiar with the industry say movement of grains — which is the third most sea-bound commodities after iron ore and coal globally — is usually seasonal and shipments increase mainly during the harvest period in main producing countries like the US, Canada and Europe.

Exports peak from December to June each year, during which time demand for shipping services increases considerably to spur the grain market. Commodity exchange platforms where traders buy and sell commodities using virtual platforms are the determinants of movement of commonly traded agriculture commodities such as wheat, corn, maize, oats, rice and soybeans on the international market.

The platforms include the Chicago Board of Trade, Kansai Commodities Exchange, Risk Management Exchange, Minneapolis Grain Exchange, Winnipeg Commodity Exchange, Tokyo Grain Exchange and Euronext.

Regardless of where the commodities are situated, one can buy and sell, and then link up with ship owners for transportation to the various destinations.

Mexico and the US are among the major sources for white maize, which according to Kenyan requirements, have to be non-genetically modified. Apart from East African countries, the Common market for East and Southern Africa is among sources of white maize for the Kenyan market.

Cost is determined by weight of commodities and distance covered by the vessels from point of purchase. Other costs and requirements are locally determined.

Once cargo arrives in Mombasa, it undergoes clearing at the customs and Kenya Port Authority offices carried out by clearing agents. Popular shipping vessels in this trade include the Handysize class which consists of the Supramax — a naval architecture term which means large bulk carriers — and carries between 50,000 to 60,000 Deadweight tonnage (DWT), Handymax (40,000 to 50,000 DWT), and Handy (less than 40,000 DWT). Deadweight tonnage means the weight of the ship plus that of cargo.

Commodities eventually land in Kenya where vessels are soon loaded with products like the Kenyan coffee and tea which has also been bought by traders through an auction for delivery in various destinations globally.

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