The decision by the government to woo cross-border importers with a 30-day free storage offer at the newly-launched Naivasha inland container depot (ICD) is laudable. It will greatly cut the trucking distance, translating to reduced costs for importers and investors in the cargo transport business who have been hard hit by Covid-19 disruptions. The Kenya Ports Authority has left the window open for further extension of the cost reprieve, depending on the business environment.
As welcome as the move is, it is however, a short-term solution. The country can’t afford to keep on giving concessions when the economy is in such a dire state.
The government needs to do more to ensure that the facility becomes the importers’ preferred port of call. There are no shortcuts to this other than addressing the concerns raised by stakeholders right from the onset of the project.
The biggest concern all along has been the higher costs importers stand to incur due to the missing last mile connection. Originally, the plan was to extend the standard gauge railway from Suswa to Kisumu, offering importers a cheap seamless connection. But failure to secure Chinese funding for the project has forced the State to instead opt to revamp the old colonial metre gauge railway with roads serving as a link between the two lines. It is hardly the ideal solution, but a move in the right direction nonetheless.
The State is, however, yet to complete the revamp, which means that in addition to the Sh60,960 the importers will at least pay for hauling a 20-foot container to the Rift Valley town from the Port of Mombasa and will have to dig deeper into their pockets to meet the cost of road transport to the final destination.
It is the same conundrum that importers picking their cargo from the Nairobi ICD have been facing, leading to protests as they find it far costlier to ferry goods on the SGR line compared to doing so by road.
Their woes have been compounded by the long time spent clearing goods at the Nairobi train depot.
To address these pressing concerns, the government should speed up upgrade of the old railway and ensure that clearing of goods is done efficiently.
Failure to do so will see the same challenges at the Nairobi depot duplicated at the Naivasha facility.