Rail­way firm halves cargo charges, giv­ing trucks a run for their money

Plans in top gear to en­sure 40pc of cargo be­tween Mom­basa Port and Nairobi is trans­ported by SGR

The East African - - FRONT PAGE - By AL­LAN OLINGO The Eastafrican

We will now start en­gag­ing the freight play­ers on im­ple­men­ta­tion.” Kenya Rail­ways Cor­po­ra­tion mang­ing di­rec­tor Atanas Maina

Kenya last week ap­proved freight tar­iffs for the stan­dard gauge rail­way, as the gov­ern­ment seeks to meet its tar­get of trans­port­ing 40 per cent of cargo from Mom­basa port by rail.

Kenya Rail­ways Cor­po­ra­tion (KPC) man­ag­ing di­rec­tor Atanas Maina told The Eastafrican that the cor­po­ra­tion has re­ceived approvals of the tar­iffs from the Min­istry of Trans­port, which will be half the road haulage rates, and will now be­gin dis­cus­sions with trans­porters.

“We had to go through the process of the ap­proval of the freight tar­iffs, which the Cab­i­net Sec­re­tary ap­proved last week. We will now start en­gag­ing the freight play­ers on the im­ple­men­ta­tion, and pos­si­bly en­ter into con­tracts with them to move their cargo,” Mr Maina said.

KRC will charge $500 to trans­port a 20ft con­tainer be­tween Mom­basa and Nairobi, half of the $1,000 that truck own­ers charge. How­ever, traders say they will spend an ad­di­tional $200 on the last mile trans­port to in­dus­tries and other des­ti­na­tions in Nairobi.

Last mile talks

The SGR cargo line will run freight trains with 54 dou­blestack flat wag­ons, car­ry­ing 216 twenty-foot equiv­a­lent units (TEU) per trip, with a load of 4,000 tonnes on each train.

“One of the key is­sues we will be en­gag­ing the stake­hold­ers on is the last mile. This dis­cus­sion will in­clude whether the cus­tomers want us to do a full pack­age that will see us de­liver the goods to their doorstep or to the in­land con­tainer de­pot,” Mr Maina said, adding that they hope to start sign­ing con­tracts with cargo firms over the next three months be­fore of­fi­cially rolling out ser­vices in Jan­uary.

From next month, Kenya will also scale up the cargo ser­vice and un­der­take a three month trial pe­riod to al­low busi­ness peo­ple and cargo freighters to do pilot runs on the SGR line.

“We want to start more tri­als with com­mer­cial cus­tomers next month so that we can get hon­est feed­back from them over the next three months. We al­ready have 1,620 freight wag­ons, and we will re­ceive 620 in Jan­uary and Fe­bru­ary next year. What we have is suf­fi­cient to get the cargo line go­ing,” Mr Maina said.

Since June, Kenya Rail­ways has been do­ing a daily eight hour cargo trip from Mom­basa to Nairobi but only with gov­ern­ment sup­plies. The cargo is then dis­trib­uted to the rest of the coun­try.

Kenya’s Trans­port Cab­i­net Sec­re­tary James Macharia said that im­prove­ment of the in­land con­tainer de­port is crit­i­cal, and that the gov­ern­ment is look­ing for more land to up­grade Kenya’s over­all cargo-han­dling ca­pac­ity.

“The ex­panded ICD can only serve the coun­try up to 2023. In the next five years, we will be ex­pect­ing to see an up­ward spi­ral in cargo traf­fic from the cur­rent 30,000 TEUS to 500,000. That is why we need to start think­ing of a big­ger han­dling cen­tre to ac­com­mo­date this cargo growth,” Mr Macharia said

“We have been pay­ing the same rate to trans­port a con­tainer via Rift Val­ley Rail­ways, so Kenya Rail­ways will have to of­fer com­pet­i­tive rates to at­tract the freighters and also ad­dress the last mile is­sues in or­der to re­main com­pet­i­tive,” Wil­liam Ojonyo, the Kenya In­ter­na­tional Freight and Ware­hous­ing As­so­ci­a­tion chair­man said.

In Mom­basa, on­go­ing works

to build a rail­way ex­ten­sion line from Berth Num­ber 10 to Num­ber 1 to ease ac­cess to cargo are be­ing un­der­taken by China Rail­way and Bridges Cor­po­ra­tion. The ex­pan­sion will ex­tend the fast train tracks to cover the 10 berths.

Mean­while, Uganda hopes that cargo op­er­a­tors will use the SGR net­work from the port of Mom­basa to the Nairobi in­land de­pot, then move the cargo from there us­ing trucks.

Ugan­dan traders

Uganda’s SGR project ex­ec­u­tive di­rec­tor Kas­ingye Kya­mugambi said that traders were los­ing up to $1.2 bil­lion an­nu­ally trans­port­ing their goods from Mom­basa to Kam­pala due to in­ef­fi­cien­cies.

“We have seen traders spend­ing up to $5,000 to bring a con­tainer from Mom­basa to Kam­pala. This is in­curred in high in­sur­ance pre­mi­ums and costs paid to truck­ing firms. The SGR will def­i­nitely cut down this cost dras­ti­cally, in­clud­ing the de­liv­ery time­line,” Mr Kya­mugambi said

Cur­rently only five per cent of im­ported cargo des­tined for Kam­pala uses the rail­way line. The rest is trans­ported by road, ei­ther through Kenya or Tan­za­nia.

Kenya Rail­ways Cor­po­ra­tion will charge $500 to trans­port a 20ft

Pic­ture: File

con­tainer from Mom­basa to Nairobi on the SGR.

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