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State slashes cost of moving cargo to Naivasha using SGR

BUSINESS NEWS
By Macharia Kamau | February 25th 2021

A cargo train leaves the port of Mombasa. Kenya Railways says the new freight rates are cost-effective. [File, Standard]

Kenya Railways Corporation has slashed the cost of moving goods from Mombasa to the Naivasha Inland Container Depot (ICD) using the Standard Gauge Railway (SGR).

In a bid to get more businesses to use the railway to Mai Mahiu, the parastatal said effective February 16, cargo owners transporting a 20-foot container from Mombasa to the Naivasha ICD on SGR will pay $510 (Sh55,600), a drop from $600 (Sh65,400).

A 40-foot container weighing up to 20.9 tonnes will be charged $725 (Sh79,000), down from $850 (Sh92,600), while a 40-foot container with a weight of 21 tonnes and above will be charged $775 (Sh84,400), a reduction from $910 (Sh99,190).

In a statement yesterday, Kenya Railways said it had engaged the business community and other stakeholders on freight rates in the lead-up to the review of charges for containerised 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 Managing Director Philip Mainga.

KRC had introduced a promotional tariff when the Naivasha ICD was commissioned in late 2019, but this ended in August 2020. At the time, a 20-foot container was charged at $480 (Sh52,300) while a 40-foor container was charged $680 (Sh74,000).

The firm said it had improved on resources supply to support and sustain cargo evacuations from Mombasa, working with the Kenya Ports Authority, Kenya Revenue Authority and Kenya Bureau of Standards.

This, it noted, can be seen in the increase in the amount of cargo ferried between Mombasa and the Nairobi ICD.

This is after it introduced double-deck trains and increased the SGR freight service’s cargo handling capacity. The double-deck trains carry 152 TEUs (20-foot equivalent units) per trip and have eased cargo backlogs.

Kenya Railways said Africa Star Railway Operation Company (Afristar), the SGR operator, has moved 186 trains from the port this month in an up direction that has so far delivered 18,972 TEUs to the Nairobi ICD.

The operator has maintained above eight trains, daily, delivering a minimum of between 800 to 1,000 TEUs.

“These efforts have positively enabled importers to receive their products and factory materials on time.”

Afristar recently introduced loading of bulk cargo on special open-type wagons covered with tarpaulins.

Despite the pandemic, the SGR cargo service made Sh11.54 billion in revenues in the 12 months to December 2020, a slight drop from Sh11.86 billion that it made in 2019.

The service was unaffected by Covid-19 and remained active despite containment measures that affected other economic sectors, only registering marginal declines in the months between March and June.

The SGR passenger service, however, took a hit following measures such as cessation of movement to and from Nairobi and Mombasa counties.

The passenger service had revenues of Sh892 million over the year, about half of the Sh1.7 billion it earned in 2019.

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