The Kenya Railways Corporation (KRC) has moved to save the Standard Gauge Railway (SGR) service from growing losses occasioned by the low uptake of the cargo train.
KRC announced a scaling down of the cost of moving cargo from Mombasa to the Naivasha Inland Container Depot (ICD) using SGR.
The reduction in prices has facilitated an increase in the amount of cargo ferried between Mombasa and the Nairobi ICD by nearly half.
Cargo owners transporting a 20-foot container from Mombasa to the Naivasha ICD on SGR will now pay Ksh55,600 a drop from Ksh65,400 while a 40-foot container weighing up to 20.9 tonnes will be charged Ksh79,000, down from Ksh 92,600.
The cost of transporting a 40-foot container with a weight of 21 tonnes has also been reduced from Ksh 99,190 and will now be charged at a rate of Ksh 84,400.
On Wednesday, February 24 KRC said it had been in a discourse with the business community and other stakeholders on freight charges during the lead-up to the review of charges for containerized cargo to and from Naivasha ICD.
“Goods destined for the hinterland, Uganda, Rwanda, South Sudan, Burundi, Ethiopia and the Democratic Republic of Congo can now be delivered cost-effectively to and from Naivasha, thus reducing the cost of doing business and spurring regional economic growth through trade facilitation,” said KRC’s Managing Director Philip Mainga.
Despite being hailed as a “game-changer” the SGR service recorded massive losses in the first three years of its operations as its most profitable service, cargo delivery, was shunned by operators due to the high cost.
A report by tabled by the ministry to Parliament in 2020, showed the SGR recorded a loss of Ksh20 billion over three years (2017-2020).
The increase in transportation followed the introduction of double-decker trains which carry 152 TEUs (20-foot equivalent units) per trip. It also increased SGR freight service’s cargo handling capacity.
KRC revealed to have been working with the Kenya Ports Authority (KPA), Kenya Revenue Authority (KRA), and Kenya Bureau of Standards (KBS) which had eased cargo backlogs and sustained cargo evacuations from Mombasa.
SGR operator, Africa Star Railway Operation Company (Afristar), has moved 186 trains from the port in February, therefore, delivering 18,972 TEUs to the Nairobi ICD.
The two cargo trains would deliver approximately 6,000 tonnes of cargo daily from the port of Mombasa to Nairobi.
“Kenya Railways continues to play a critical role in the evacuation and transportation of cargo reducing dwell time at the Port of Mombasa,” the corporation stated.
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