Aside from seeking to find more cargo and business for the SGR in a bid to make it viable and thus justify the Sh350 billion used for its construction, there appears to be no plausible reasons for the MPs’ proposals.
While the legislators made the laudable move of shooting down the earlier directive to force all importers to use the SGR, it appears they took away with one hand what they had offered with the other.
The National Assembly’s Transport committee has proposed increased levies for traders ferrying their goods by road from the port of Mombasa to Nairobi. The stated aim of the additional fee is to encourage importers to use the standard gauge railway (SGR) whose levy is much lower.
Under the recommendations by the House committee, traders using road to ferry their cargo will part with 2.8 percent of the cost of goods ferried by road — 0.3 percentage points more — in Railway Development Levy, from 2.5 percent currently. Those using the SGR will continue paying the lower fee of 1.5 percent.
Aside from seeking to find more cargo and business for the SGR in a bid to make it viable and thus justify the Sh350 billion used for its construction, there appears to be no plausible reasons for the MPs’ proposals.
While the legislators made the laudable move of shooting down the earlier directive to force all importers to use the SGR, it appears they took away with one hand what they had offered with the other.
The MPs made the valid argument that traders have a right to choose which means of transport is good for them. However, they went ahead to contradict their own ingenious proposal by coming up with discriminative levies.
No directive or amount of increase in levies will make SGR the preferred means of transport for importers. This is a strategy that will not achieve its intended objectives. The only way to attract cargo to the new railway line is to make its use more efficient, convenient and cheaper than that by the road. Transporters have cited a number of reasons to demonstrate that this is not the case currently.
Some importers say using SGR is more costly due to extra fees imposed, delays in clearing goods at the congested Nairobi depot and that they are required to send trucks to collect the goods after clearance. These and other factors do not make SGR the better option.
If these bottlenecks can be removed, traders will definitely use the railway on their own volition because of the benefits that accrue to them. Applying coercive measures in a bid to make the SGR appear viable is not only misplaced but it is also unsustainable.
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