Shipping & Logistics

Metre Gauge rail revenue increases 6pc

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Hostesses wait to usher in commuters to the newly commissioned diesel trains at the Nairobi Central Railway Station on November 10, 2020. PHOTO | JEFF ANGOTE | NMG

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Summary

  • The Kenya National Bureau of Statistics (KNBS) data released last week shows that the passenger and cargo trains generated Sh1.196 billion last year, up from Sh1.130 billion in 2019.
  • Revenue earned from MGR cargo stream however rose by 15.7 percent from Sh963 million in 2019 to Sh 1.114 billion in 2020.

Revenue generated from cargo and passenger services on the metre gauge rail (MGR) trains increased by 6 percent in 2020 defying the economic knocks of the Covid-19 pandemic, official statistics show.

The Kenya National Bureau of Statistics (KNBS) data released last week shows that the passenger and cargo trains generated Sh1.196 billion last year, up from Sh1.130 billion in 2019.

Revenue earned from MGR cargo stream however rose by 15.7 percent from Sh963 million in 2019 to Sh 1.114 billion in 2020.

The pandemic hit hard the logistics sector including public transport and the long-haul transits following the imposed night curfew and restrictions of movement in and out of Nairobi metropolitan area, Mombasa, Kilifi, Kwale and Mandera. The restrictions were lifted in May.

The cargo service remained in operation as the passenger trains were halted in line with government’s directives, to support flow of goods through the Mombasa port.

“Increase in cargo revenue is partly attributed to increase in the volume of high value cargo transported in the review period," says the KNBS report.

During the period, the number of passengers transported via MGR declined by more than 50 percent from 4 million in 2019 to 1.9 million in 2020. Consequently, revenue from MGR passenger stream fell by over 50 percent from Sh167 million to 82 million in 2020.

"The decline in the number of passenger is largely attributed to restriction of movement by the Government to combat the spread of a void 19," says the report.

The Standard Gauge Rail (SGR) is currently the trunk line running from Mombasa on Kenya's Coast to Kisumu in the western part of the country, while the MGR line retains a connectivity role for areas that the SGR does not reach.

The MGR line also serves estates within Nairobi such as Ruiru, Makadara, Embakasi, Dandora as well as Kibeta among others.

It charges between Sh40 andSh60 to ferry passengers from the city in to the estate in the morning and the evening.

In its budget for the 2021-2022 financial year, the National Treasury has set aside more than Sh32 billion that will be used on the improvement of the railway services.

The money will also be spent on improving the commuter railway in Nairobi , where there are plans to construct new stations as well as link lines to the Nairobi, increasing access by commuters.

SGR that resumed operations in May 2017 on the other hand operates an express train from Nairobi to Mombasa and an inter-county service that stops at Athi River, Emali, Kibwezi, Mtito Andei, Voi, Miasenyi, and Mariakani stations.

It charges Sh1, 000 on economy class seats and Sh3, 000 on fast class seats between Nairobi and Mombasa –a journey that takes about four and half hours.

Kenya Railways Corporation (KRC) in 2017 contracted AfriStar, a subsidiary company of China Road and Bridge Corporation (CRBC), to manage SGR operations and maintenance.

Under the contract, the operator has the right to manage the ticketing system and any associated software and hardware.

KRC has hover commenced a gradual takeover of operations on the standard gauge railway from Africa Star Railway Operation Company (Afristar) amid concerns of high costs of keeping trains moving.

Some of the already assumed ticketing, security and fuelling functions on the SGR passenger and cargo trains as part of a deal to fully run operations on the Chinese funded and built track by May next year.

Afristar has however demanded billions of shillings in unpaid bills before handing over fully to Kenya, a move that could delay the handover of operations.