Kenyans to charm more Ugandans onto SGR

July 24, 2018 in Business, Infrastructure, Transport by Editor

July 24, 2018—There are tentative plans in the near future for a joint Kenya Railways Corporation/Kenya Ports Authority junket to Uganda, to popularize use of the standard gauge railway (SGR) and the inland container depot at Embakasi rather than Mombasa port for all Ugandan imports and exports. Embakasi is on the outskirts of metropolitan Nairobi.

Recently, James Macharia, Kenya’s transport and infrastructure secretary, disclosed to a parliamentary committee a $100 million first year loss the new $3,2 billion Chinese-built line had made and the need to drum up more cargo business.

“Part of the reason we made the loss last year was that it was a bit difficult to convince people that the railway was good for their cargo businesses,” Macharia told legislators.

At just over 80 pc of total transit cargo, Uganda is the leading customer at Mombasa port, but business people have been slow in making the shift from trucking goods along the highway to the SGR for part of the journey to Kampala. According to KPA, total Ugandan imports through Mombasa reached 6,590,095 million tons.

The Kenya government is already offering 50% cuts on freight rates as an inducement to attract customers and these tariffs are valid till the end of 2018. It has also directed that all government consignments be ferried on the Madaraka line. Today, eight freight trains ply the route daily, but plans are to beef this up to 12 and begin towards making profits by the end of financial year 2018/19.

Between Mombasa and Nairobi, a 20-foot container is now charged $250 while the 40-foot version is charged $350.  In comparison haulage firms will ask for $700 and $1000 respectively. However several logistics professionals have told 256BN, the worry many Ugandans business people is the efficiency at the Embakasi ICD for them to get their containers offloaded or loaded, depending the circumstances, as soon as possible.

“Any time we might save by using the SGR can also loss at Embakasi, because it is still a relevantly new operation with plenty of teething problems,” one shipper told 256BN.

In February this year, Kenya Railways management wrote to the Kenya Shippers Association and said in part, ‘KPA and KR will facilitate to ensure that the cargo owners and other relevant information will go a long way into enabling a smooth flow of cargo to ICD for the benefit of cargo owners’.

Later in April, Mads Skov-Hansen, Maersk Line Eastern Africa Managing Director said the direct link between the port in Mombasa and the Inland Container Depot (ICD) in Nairobi offers alternative solutions to transport cargo from Kenya’s international trade partners to key inland markets.