SGR rakes in Ksh.1B in first year of service


The Standard Gauge Railway (SGR)
The Standard Gauge Railway (SGR)

In Summary

  • During the one year period 1,144 trips have been made on the SGR. This equals transporting close to 1.3 million customers between Nairobi and Mombasa at a cost of 700 and 3000 shillings for economy and first class respectively.
  • The government in the process raked in an estimated 1 billion shillings in revenues.
  • Experts have since warned that if this trend continues, then the investment will not yield value for taxpayer’s money.

It has been one year since Kenya launched its Standard Gauge Railway (SGR) services dubbed the Madaraka Express.

The passenger service seems to have struck a good chord but on the other hand, Cargo service, which was to be the key mandate of the SGR still struggles to get its balance.

The project gobbled up Ksh.330 billion and was labelled the country’s most expensive infrastructure.

“Since we started the trains have been full throughout the lowest recording being in the region of 85 % otherwise we’ve been at 100 percent occupancy,” said Kenya Railways Managing Director Atanas Maina.

During the one year period 1,144  trips have been made on the SGR. This equals transporting close to 1.3 million customers between Nairobi and Mombasa at a cost of 700 and 3000 shillings for economy and first class respectively.

The government in the process raked in an estimated Ksh.1 billion in revenues.

“Government policy was to first ensure that Kenyans can move as fast as possible safely efficiently for business and leisure so we don’t see ourselves increasing the fares over the next one year,” observed Atanas.

But with this improved tide and with economy class fares having increased to Ksh.1,000 Kenya Railways is already envisioning additional rides between Mombasa and Nairobi daily.

“The plans we are putting in place it to look at what we require in terms of additional capacity for coaches that should be ready in the next 12 months. Next is to bring in additional locomotives and coaches to provide additional trains service and in the next 24 months we will have taken care of this medium term plan,” said Atanas.

But while the passenger service seems like the silver lining, the SGR model was mooted and built to ease cargo transportation but even after it was introduced only five months ago is yet to click.

“Why is cargo proving quite a hustle for all the stakeholders involved?” we posed to the Kenya Railways Managing Director.

“There are so many handlers involved and with that comes the challenge of adjusting, its a new revolutionary service, as you go through this process you expect such teething problems will be overcome,” answered Atanas.

Initially, cargo was to be cleared in less than six hours but this is yet to be achieved with importers waiting for more than three weeks to access their containers.

“There are KRA issues, there are KPA issue all of which we are working together as a joint team in order to resolve and its just a matter of time before customers start enjoying these services,” said Atanas.

These challenges have, however, seen most importers shy away from the freight services despite huge discounts that have been offered by the government over time.

Experts have since warned that if this trend continues, then the investment will not yield value for taxpayer’s money.

The government had planned to re-route between 30 and 40 percent of cargo from Kenyan roads through the new cargo service.

While this is yet to be achieved, pundits say the project will not break even and servicing the over 300 billion shillings loan may prove a toll order for the country.

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Story By Patrick Igunza
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