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Economy

Macharia’s final word on SGR forced cargo use out in three weeks

 James Macharia
Transport Secretary James Macharia. FILE PHOTO | NMG 

A decision on whether importers will be forced to use the standard gauge railway (SGR) to transport cargo from Mombasa port will be known in three weeks.

Transport Secretary James Macharia told Parliament consultations on compulsory usage of the SGR for goods to Nairobi and beyond are ongoing.

The taxman and Kenya Ports Authority on Tuesday made a U-turn over a directive compelling importers to use the SGR after an uproar from the traders and MPs. “Consultations started as early as last week, are countrywide and will conclude in three weeks’ time,” he told the National Assembly Transport Committee yesterday.

A week ago, the Kenya Revenue Authority and the KPA had issued a joint public notice to importers requiring them to move their containers from Mombasa to Nairobi Inland Container Deport (ICD) through the SGR.

The move looked set to boost SGR cargo revenues but hurt road truckers and operators of container freight stations in Mombasa that operate like clearance ports.

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Since its unveiling in May 2017, the SGR cargo train has struggled to attract adequate volumes, with investors balking at the tariffs to transport goods from the Mombasa port to the ICD in Nairobi.

The order triggered opposition from MPs with the lawmakers summoning Mr Macharia over the cargo directive.

He explained that the consultations will not look at the Mombasa port in isolation rather, include stakeholders along the railway corridor.

MPs heard that that no importer had been forced to transport cargo through the SGR.

Kenya Transporters Association reckons that it cost about Sh80,000 to truck a container from the port to a business on the outskirts of Nairobi by road.

The container will cost nearly Sh100,000 on the SGR including the Sh30,000 fees of getting the cargo from the ICD in Embakasi to the owner’s premise.

“The tariff is a public document and importers have access to it to decide on whether to use the rail or the trucks,” said Mr Macharia.

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