This archive report was first published on 23 June 2020.
Kenya Railways Cuts SGR Tariffs in Fresh Push to Woo Transporters ¶
On June 24, 2020, Kenya Railways made a move to lower cargo tariffs in an attempt to make Naivasha dry port economically viable, even as a recent court ruling casts doubt on the future of Standard Gauge Railway (SGR).
The move aims to attract transporters to use the Inland Container Depot (ICD) from Mombasa to Naivasha. Kenya Railways has reduced freight charges from $600 to $480 for a 20-foot container and from $850 to $680 for 40-foot container.
The reduction in tariffs comes at a time when the Court of Appeal has ruled that the award of tender to a Chinese firm was unlawful, casting doubt on the completion of the SGR. The ruling has created uncertainties on whether the project, which is now stuck in Naivasha for lack of funding, will proceed.
Philip Mainga, Kenya Railways Corporation (KRC) managing director, said in a letter that the rates will run from June 2 for a period of 90 days. The government seeks to shore up numbers after Uganda protested the compulsory use of the Naivasha ICD, with a court putting an injunction last week on the compulsory use.
However, the Kenya Transporters Association says the move to cut levies is aimed at frustrating truck owners. Dennis Ombok, KTA chief executive officer, said, 'The move by State to offer promotional rates is just but an afterthought to fight road transport.'
Shippers' council chief executive officer Gilbert Langat said his body is not concerned with the mode used but rather what will work better for them in terms of cost and efficiency. 'For us it is about the system that will be cost effective and efficient, whether it is road or railway,' he said.
