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Shipping & Logistics

SGR pulls revenue plug from the old metre-gauge railway

Jean Pascal
Bollore Transport and Logistics MD Jean Pascal (left) with then Kenya Railways Commercial Expert Sammy Gachuhi during the flagging off of a full freight SGR train from Mombasa to Nairobi last year. FILE PHOTO | NMG 

The old metre-gauge railway between Mombasa and Nairobi is proving to be unsustainable to the Kenya Railways Corporation (KRC) with statistics indicating it hauled only 414,598 tonnes of cargo in the past one year.

The metre-gauge railway (MGR) which service seven locomotives used for shunting, 27 for freight services and a total of 1,107 wagons and seven brake vans has been left to ferry conventional cargo to remain afloat after the introduction of the Standard Gauge Railway (SGR) freight train in June last year.

According to the Northern Corridor Transport Observatory Report, KRC is investing in developing the MGR to connect it with the SGR in the first and last mile in its bid to decongest Port of Mombasa and the Inland Container Depot (ICD) in Nairobi.

“Plans for linkages between metre gauge rail and SGR for first and last mile connectivity is ongoing in Nairobi from ICD to client premises from the MGR yard,” the report said.

“This will ensure ICD is decongested and also to reduce number of trucks congesting the facility which has the capacity of holding more than 450 TEUs.”

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The survey shows that importers ferrying conventional cargo from Mombasa to Nairobi and other hinterland regions opt to use MGR which is cheaper as opposed to SGR which carry specialised in containerised cargo.

The MGR has been ferrying different categories of cargo such as steel rails, wire coils, fertiliser and rice but it was noted that volume of the goods over the past one year has been inconsistent.

Statistics from KRC indicate that between July 2018 and March 2019, KRC had the highest volume of about 41,244 and 40,826 net tonnes respectively, while February 2019 registered the lowest volume of nearly 26,187 net tonnes.

The government has been struggling to run MGR due to its operating cost with The Rift Valley Railways (RVR) forced to surrender the assets after a 25-year contract was cut short on the 11th year due to breach of terms of the deal with the government.

In August 2017, KRC took over operations of the more than 100-year metre gauge rail after RVR defaulted on three key terms of the concession agreement, namely maintenance of conceded assets, freight volume target and payment of concession fees.

The MGR line connects the Port of Mombasa to Nairobi and Nakuru and ultimately Kenya-Uganda border at Malaba. A branch route leaves the main railway line at Nakuru and extends to Kisumu on Lake Victoria.

The rail track from Nairobi to Kampala via Malaba is currently the principal route for rail transport between Kenya and Uganda.

Since the introduction of the 485km standard gauge line from the Port of Mombasa to Nairobi depot, MGR has remained unviable with SGR hauling the largest percentage of the cargo.

Statistics show that the total SGR throughput has been increasing steadily over time. The number of trains leaving Mombasa port for Nairobi has risen to a high of 214 trips in January this year carrying a total of 22,624 TEUs.

Similarly, the number of trains leaving Nairobi for Mombasa port also increased to a high of 134 in the same period carrying a total of 12,920 TEUs. Overall total TEUs moved by SGR was approximately 323,158 from January 2018 to February 2019, out of which exports constituted 33 percent.

Another key notable feature is the rise of empty containers that are railed back to Mombasa without cargo. More than 90,000 empty containers were carried from Nairobi ICD to the Port of Mombasa representing 87 percent of total export TEUs.

The haulage of empty containers by the SGR does not only affect the economic aspect of the shipping line business but has a positive environmental effect as it eliminatesg multiple trucks ferrying empties on the road.

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