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What is government not telling us about the SGR?

By Killiad Sinide | October 18th 2019
By Killiad Sinide | October 18th 2019
A Standard Gauge Railway train with containerised cargo leaves the Mombasa port for Nairobi in March this year. Experts have dismissed the viability of the controversial line. [Maarufu Mohamed, Standard]

Residents and businessmen in Mombasa have for the past four weeks held demonstrations to protest a government directive that made it compulsory to transport all import cargo via the SGR.

Every Monday, the protestors would take the streets to decry the order, a move that they say will bring the economy at the coastal town to its knees. Last Monday was no different but only more dramatic.

This time, police marched their bravado with antiriot gear, shoved protesters with teargas canisters and arrested a few activists who were questioning the government’s sincerity in suspending the directive.

“It has not been implemented,” says George Mombo, a mechanic. “I cannot transact any business if there are no trucks on the road,” he laments. Long distance trailers form Mombo’s customer base.

But Mombo is not the only casualty of the punitive order. The directive has taken its toll on truck drivers who have either been laid off or had their wages slashed. A driver could make up to 14 trips in a good month.

“I only get one trip a month these days, or two when lucky,” says Kombo, a Mombasa based truck driver. “There’s nothing to survive on really, we are paid peanuts,” he tells me.

A study done by the University of Nairobi School of Business showed Mombasa County lost Sh17.4 billion and 2,987 jobs equivalent to 8.4 per cent of its annual earnings since the implementation of government policies requiring mandatory transfer of most import cargo through the Madaraka SGR freight service to Nairobi in 2017.

The Port of Mombasa is known to be the region’s economic backbone through which thousands of residents benefit either directly or indirectly. Container Freight Stations (CFS) have employed hundreds of youths in Mombasa.

Similarly, transport companies in Mombasa have been a major source of income not only to locals but the long distance cargo transport business has been felt by people living in towns along major highways.

The road transport food chain

Economist David Ndii last year criticized the government’s decision to subsidize freight services for the railway by giving it a monopoly over cargo transport. In doing this, the government would be “undermining the economy of a historically undermined region,” he said.

“From the time a truck leaves a CFS in Mombasa to when it reaches its destination, it would feed almost 20 families,” says Sadiki Kimario. Kimario worked as a clerk at Kassam Haulers, a transporting company in Mombasa.

First are the handy porters who load cargo into the trucks. Most of them are robust young men who never saw the door to college or even secondary school. Porters would loiter at CFS’s, transport companies or weighbridges ready to pounce on any weight that needed some lifting. Before them would be clerks who handle most of the paperwork involved.

Then there are hawkers, the men and women who dash at any vehicle that seems to be making a stop at these small towns and nondescript stages along major highways. Kimario would tell me that truck drivers buy a lot of stuff from these hawkers. Sometimes they even buy sex. “There are also patrol officers,” he says casually.

On to the restaurants, night bars and lodges where long distance travelers would often stop to grab a bite, catch some rest or literally get one for the road. “Where would you take all these people?” posed Kimario.

The 26-year-old Kimario was rendered jobless after Kassam Haulers laid off workers due to an increasing decline of the quantity of cargo transported via trucks after the introduction of the SGR into the market.

Is the government backing the wrong horse?

But why is the government so keen on monopolizing the transportation of cargo from the Mombasa port via the SGR? On Wednesday, Transport CS James Macharia said during an interview on KTN News that it would be impossible to have a profitable SGR without freight services. “Even if we have 10 trains carrying people from Mombasa to Nairobi,” he said.

Although questions have been asked about the viability of the Sh327 billion project, the government insists that the SGR is profitable. After launching phase 2A of the construction from Nairobi to Naivasha, the Transport CS termed it as the “most viable and profitable project in Sub Saharan Africa.”

A report he tabled before National Assembly’s Transport Committee in 2018 however contrasted this recent stance. Documents revealed that the SGR made a Sh9.89 billion loss in its first year of operation. “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,” said Engineer Macharia.

However, renowned academician Professor Alfred Omenya believes that the SGR will still not be viable even when it operates at its full capacity. “For the SGR to be functional we need to carry about 400% the freight capacity of the entire East African community potential,” he told KTN News.

A 2013 World Bank report warned that the project would not be viable at the time. It also advised that it would be more appropriate to refurbish the existing meter gauge railway.

Furthermore, the World Bank noted that investment in standard gauge would only to be justified if the new infrastructure could attract additional freight to the tune of 20–55 million tonnes per year.

“If government is convinced that the SGR is profitable, why can’t they put the figures on the table? Asks Prof Omenya.

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