× Business BUSINESS MOTORING SHIPPING & LOGISTICS DR PESA FINANCIAL STANDARD Digital News Videos Health & Science Lifestyle Opinion Education Columnists Moi Cabinets Arts & Culture Fact Check Podcasts E-Paper Lifestyle & Entertainment Nairobian Entertainment Eve Woman Travelog TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS

SGR revenue plan goes off track

By Awal Mohammed | April 22nd 2020

The standard gauge railway (SGR) will take longer to break even following disruption of passenger and cargo services by the coronavirus pandemic.

Income from the freight and commuter services was expected to ease the pressure on the Railway Development Levy and other budgetary supplements that the project has been heavily relying on to operate.

“Our operations have been affected. Until normalcy resumes and we start to operate, only then can we review our projections,” Kenya Railways Managing Director Phillip Mainga told The Standard.

Kenya borrowed Sh324.01 billion from China’s Exim Bank in May 2014 to build the 385-kilometre modern railway between Mombasa and Nairobi.

A five-year grace period on the loan ended last year, and the government will start paying the instalments this year.

But the SGR line raked in sales of only Sh10.1 billion in its second full year of operations, signalling that the mega project would take longer to break even.

Earlier this month after the government announced a cessation of movement in and out of Nairobi to curb the spread of Covid-19, Kenya Railways suspended the SGR commuter train to Mombasa, hurting the already struggling service.

Cargo transport was expected to shoulder the bigger burden in offsetting the loan, but the service has had low uptake with many transporters opting for the road.

Share this story
Treasury cuts GDP forecast to 2.5 per cent
It would be the worst year for the country since 2008 when the post-election violence that followed the 2007 presidential polls crippled the economy.
Absa Bank net profit for 3 months up 24pc
The performance was mainly driven by growth in interest income, particularly in the small and medium enterprises.