How Government can turn around SGR cargo services

Amid all the shenanigans occupying public discourse in the last few weeks, a number of developments concerning the Standard Gauge Railway (SGR) have taken place but got drowned by political noise. The first was realisation that the cargo service, launched with a lot of fanfare, is struggling to send even a single train inland per day against a projection of four. This is despite flooring of prices for the second time in a month. Then Kenya Railways managing director Atanas Maina announced they were pulling off a plan to electrify the railway line citing high costs and irregular power supply. A few days later the government increased tariffs for passengers traveling to Mombasa saying the current prices are promotional.

And just when we thought the drama was over, the state made a sudden turnaround and secured a Sh25 billion loan for electrifying the railway. Then it declared all imports whose final addresses are not specified will be transported to Nairobi for clearance. Now, when such things happen in quick succession then all may not be well with Kenya’s largest and most expensive piece of infrastructure. After a phenomenal launch of the passenger service, questions are now emerging over viability of the railway line. And it has all to do with cargo which has failed to tick so far. As one of the journalists who have reported on the SGR since its inception I still maintain the SGR was a good project and debt is not bad. If used well borrowed money stimulates economic growth. You don’t need to go far to witness this. If you live in Nairobi just drive along Thika road in the morning. The traffic jam being witnessed every morning that was not there five years ago when the road was opened is enough evidence of massive real estate investment in that section of town.