SGR beats pandemic blues as old Metre Gauge railway roars back to life

A Standard Gauge Railway cargo train arrives at the Naivasha Inland Container Depot In Mai Mahiu, Nakuru County. [Kipsang Joseph, Standard]

The Standard Gauge Railway (SGR) service has bounced back to pre-pandemic levels.

Earnings from the haulage of cargo as well as the passenger service grew significantly last year to rival what Kenya Railways earned from the two services before the Covid-19 pandemic hit the transport and logistics sectors.

This is even as the government’s investments in the old railway, especially the rehabilitation of Nairobi Commuter Rail, show signs of paying off.

The revenues for the Metre Gauge service grew significantly in 2021 after years of stagnation.

The Kenya Economic Survey 2022 shows that revenue from SGR cargo service went up 24 per cent last year to Sh13 billion, which is at par with what the service raked in 2019.

While the cargo service continued operations even after the pandemic broke out, global supply-chain constraints affected the flow of goods into the country and affected its earnings, that declined to Sh10.5 billion in 2020.

“The SGR freight haulage increased by 22.6 per cent from 4.4 million tonnes in 2020 to 5.4 million tonnes in 2021. As a result, revenue realised from cargo haulage rose by 24 per cent from Sh10.5 billion in 2020 to Sh13 billion in 2021,” said the Economic Survey published last Thursday by Kenya National Bureau of Statistics (KNBS).

“The increase in tonnage and revenue was partly attributed to the full utilisation of the expanded Nairobi Inland Container Deport (ICD), re-introduction of double stack and long freight trains. In addition, enhanced collaboration between Kenya Railways and other agencies resulted in expeditious processing and evacuation of cargo.”

Revenues from the passenger service increased to Sh2.2 billion, surpassing the pre-Pandemic earnings that stood at Sh1.7 billion in 2019.

The passenger service was affected by the pandemic and reported zero activity over some months during 2020 after the government put in place containment measures to curb spread of Covid-19.

“The number of passenger journeys by Madaraka Express more than doubled from 806,000 in 2020 to 1.99 million in 2021. Similarly, revenue from passenger traffic more than doubled to Sh2.2 billion in 2021 from Sh896 million in 2020,” said KNBS in the Economic Survey.

“The increase in passenger traffic and revenue was buoyed by easing of Covid-19 measures relating to mobility coupled with introduction of additional passenger train for night travel.”

The Metre Gauge Railway also posted improved performance following the refurbishments that Kenya Railways has undertaken on the old railway lines.

Among these include the improvement on the railway lines used to ferry passengers in and out of Nairobi’s Central Business District (CBD).

KRC has also re-introduced passenger services on some upcountry routes including Nairobi and Nanyuki as well as to Kisumu.

Revenues from the MGR passenger service increased to Sh243 million up from Sh83 million in 2020.

“The number of passenger journeys by MGR more than double from 1.9 million in 2020 to 4.5 million in 2021. Consequently, the revenue from MGR passenger service significantly from Sh83 million in 2020 to Sh234 million in 2021,” said KNBS in the Economic Survey.

“The upsurge was mainly attributed to easing of Covid-19 containment measures in the country, continued revamping of the Nairobi Commuter Rail service through the full operationalisation of 11 Diesel Multiple Units and the introduction of new routes to Limuru and Lukenya.”

At the same time, revenue from the cargo service on the old line remained flat. According to the survey, there was a decline in the amount of cargo ferried using the Metre Gauge.

The decline in the quantity was however offset by the haulage of high value cargo, saving the service from experiencing a drop in revenues.

“The volume of cargo transported through MGR declined marginally… this was mainly due to a decline in import volumes of steel,” reads the Survey in part.

“Despite the drop in cargo haulage, there was a slight increase in revenue from MGR cargo stream… partly due to ferrying of high value cargo.”

Financial Standard
Premium Foreign investors smile all the way to the bank as lenders issue record dividends
Financial Standard
Premium How Nock missed out on bumper fuel deal
Premium Dollar shortage plunges Kenya Power operations into darkness
Premium Why Monday's protests have rattled government, businesses
The Standard
Subscribe for the KES1999 KES999 offer today!