This archive report was first published on 24 June 2020.
On June 2, 2020, Kenya Railways implemented a 90-day reduction in Standard Gauge Railway (SGR) cargo tariffs, aiming to boost the Naivasha dry port's economic viability and attract more transporters.
The new rates see a 20% decrease in freight charges, with a 20-foot container now costing $480 (from $600) and a 40-foot container costing $680 (from $850).
However, the Kenya Transporters Association (KTA) has expressed concerns that the move will negatively impact truck owners, whose costs of transportation differ from the new rates.
According to Business Daily, KTA's recommended rates from Mombasa to Kampala are $2,400, but most trucks charge a flat rate of $1,900 for both 20ft and 40ft containers. In contrast, the Transport ministry's rates from Mombasa to Uganda cost $2,180, comprising SGR from Mombasa to Naivasha and road transport to Kampala.
Ugandan businesses had previously expressed dissatisfaction with a directive to shift all cross-border transit cargo from Mombasa to the Inland Container Depot (ICD) facility in Naivasha using the SGR, citing rail transport as more expensive than road transport.
The slashing of tariffs comes just a week after the Court of Appeal ruled that the SGR contract is illegal, citing Kenya Railways' failure to follow procurement laws and fault in the feasibility study by China Road and Bridge Corporation (CRBC).
