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Economy

SGR freight unit cuts cargo fees to Sh50,000

President Uhuru Kenyatta flags off the standard gauge railway cargo train yesterday as Deputy President William Ruto (left) looks on. Mr Kenyatta will today launch the passenger train service between Mombasa and Nairobi. PHOTO | DPPS
President Uhuru Kenyatta flags off the standard gauge railway cargo train on May 30, 2017 as Deputy President William Ruto (left) looks on. Mr Kenyatta will Wednesday launch the passenger train service between Mombasa and Nairobi. PHOTO | DPPS 

It will cost $500 (Sh50,000) to transport a 20-foot container from Mombasa to Nairobi by rail, a 37 per cent discount on what truck operators charge.

Kenya Railways managing director Atanas Maina said the introductory rates will apply when standard gauge railway (SGR) starts operating from December.

“These are very competitive rates that are at least 30 per cent lower than those charged when cargo is transported on trucks and we will review the frequency of the trains according to demand,” he said.

He spoke at the Mombasa port’s second container terminal where President Uhuru Kenyatta flagged off a freight train loaded with 59 containers.

The rates are expected to rattle road transporters who charge an average of Sh80,000 per truckload. Transporters have asked the government not to subsidise freight transport, saying this will drive them out of business.

China Communications Construction Company will operate the new rail built by Chinese loans estimated at Sh447.5 billion, including financing costs.
The railway will supplement a decrepit narrow-gauge track prone to derailing and operated by Rift Valley Railways.

The new railway line will ferry heavier and bigger containers faster, relieving pressure on the region’s congested roads as well as increase Kenya’s competitiveness as an investment destination, Mr Maina said.

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