Shipping & Logistics

Passengers left exposed as SGR trains insurance delays

Haggling over insurance for the SGR trains is said to have been going on for months. FILE PHOTO | NMG
Haggling over insurance for the SGR trains is said to have been going on for months. FILE PHOTO | NMG 

Hundreds of passengers who ride on Madaraka Express between Nairobi and Mombasa have been left exposed as the train operator is yet to procure an insurance policy.

China Road and Bridge Corporation (CRBC) says it is yet to prequalify service providers three months after the much publicised launch of the standard gauge railway (SGR) trains.

That means no compensation can be forthcoming for passengers or members of the public injured or killed in accidents involving the trains. In an interview with the Business Daily, the CRBC would not state when the process is likely to be complete.

“I don’t want to comment on that matter because discussions are still going on with insurance scheme providers,” said Li Yang, a CRBC officer in charge of commercial and liaison department.

Mr Yang however declined to respond to other queries from us saying Kenyans need to be patient as the firm undergoes a learning process on how trains are insured in Kenya.

The two Madaraka Express trains which have been operating daily from both directions, offering a four-and-a- half hour non-stop connection between the two cities have been operating without a liability insurance since its launch by President Uhuru Kenyatta in May.

According to the statistics by the Kenya Railways, about 281,725 passengers had used the Madaraka Express train between May and August.

Sources told the Business Daily that haggling over the service provider has been going on for months between the CRBC, transport ministry officials and the Kenya Railways managers.

The officials are said to have reviewed packages offered by several insurers and settled on the AIG Insurance for the third party liability cover due to its lowest price but the CRBC has not been keen on procuring the firm’s services.

According to AIG schedule, third party liability cover calls for sum assured of Sh3 million per passenger or Sh4.5 billion per one way trip of 1,488 passengers.

The fast train operator also expects to move tens of containers daily between Mombasa port and Nairobi from January 2018.

The Kenya Ports Authority has since allocated a quarter of 40 per cent of its one million-a-year yard containers to be moved by the SGR trains. That loosely translates to an annual volume of 400,000 tonnes to be moved in double-stack containers.

The AIG intends to cover the SGR containers and equipment for a sum of up to Sh8.2 billion, its offer schedule shows. The equipment include 60 freight wagons, 31 passenger wagons, 15 passenger and cargo locomotives, 182 general rail switches and six passenger service facilities.

The 472km SGR line constructed at a cost of Sh327 billion so far is the most expensive public asset to be built under Mr Kenyatta’s administration.

In June alone, the trains ferried 74,691 passengers. The train from Mombasa to Nairobi carried 36,665 passengers while the one on the opposite trip had 38,028 passengers.

In July, there were 89,717 people riding the Madaraka Express trains with those leaving the capital city for the coast being 44,916. Those heading to Nairobi from Mombasa were 44,802.

Another 83,344 people moved between the two cities in August. Those from Nairobi were 42,173 while 41,171 travelled from Mombasa to the capital city.

The Mombasa-Nairobi phase of the project, which was completed in 18 months, created 30,000 direct jobs and an additional 10,000 indirect jobs.