The State is finally getting its act together after starting on the wrong footing when it launched the Naivasha Inland Container Depot (ICD) last month with a fiat that all regional cargo must be hauled to the facility.
Unsurprisingly, the decree attracted resistance with importers saying that their main concern - cost- had not been addressed. But now it appears the government is finally giving them an ear, if the latest tariff cut is anything to go by. Kenya Railways has started a promotion that will see it haul a 20-foot container from Mombasa to the ICD at $480 from $600 and charge $680 down from $850 for 40-foot container. It will last for 90 days. That is a good start.
However, instead of a promotional tariff, the State should adopt it as the official charge rate.
With a costing that comparatively makes transport via road expensive, the value proposition will be obvious, making it easy to attract the volumes of cargo that the modern rail was originally envisioned to handle. This kind of costing calls for the State to take into consideration what many critics of that rail have come to term as “hidden costs”-handling, last mile transport, return of empty containers to railway terminals and last mile for empty containers to depots. Failure to do so will see importers continue shunning the railway.
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