This archive report was first published on 18 October 2019.
Government's SGR Monopoly Sparks Economic Woes in Mombasa ¶
Residents and businessmen in Mombasa have been protesting a government directive that makes it compulsory to transport all import cargo via the Standard Gauge Railway (SGR). The move has led to economic hardship, with many losing their jobs or seeing their wages slashed.
According to a study by the University of Nairobi School of Business, Mombasa County lost Sh17.4 billion and 2,987 jobs equivalent to 8.4 per cent of its annual earnings since the implementation of government policies requiring mandatory transfer of most import cargo through the Madaraka SGR freight service to Nairobi in 2017.
Long distance truck drivers, who were once a major source of income for locals, have been particularly affected. A driver could make up to 14 trips in a good month, but now they only get one trip a month, or two when lucky.
"There's nothing to survive on really, we are paid peanuts," said Kombo, a Mombasa-based truck driver.
Container Freight Stations (CFS) have employed hundreds of youths in Mombasa, and transport companies have been a major source of income not only to locals but also to people living in towns along major highways.
However, the government remains committed to its SGR project, with Transport CS James Macharia saying that it would be impossible to have a profitable SGR without freight services.
Despite questions being raised about the viability of the Sh327 billion project, the government insists that the SGR is profitable. However, a report tabled before National Assembly's Transport Committee in 2018 revealed that the SGR made a Sh9.89 billion loss in its first year of operation.
Renowned academician Professor Alfred Omenya believes that the SGR will still not be viable even when it operates at its full capacity.
"For the SGR to be functional we need to carry about 400% the freight capacity of the entire East African community potential," he said.
A 2013 World Bank report warned that the project would not be viable at the time and advised that it would be more appropriate to refurbish the existing meter gauge railway.
Published on October 18, 2019, at 6:29 PM.
