State raises cost of moving cargo to Naivasha via railway

By Macharia Kamau 

A cargo train leaves the port of Mombasa for ICD Nairobi. Kenya Railways says the new rates are cost effective. [File, Standard]

Importers will now have to fork out more money to transport their cargo from Mombasa to the

Inland Container Depot (ICD) in Naivasha. This is after Kenya Railways Corporation (KRC) reviewed upwards the cost of using the Standard Gauge Railway (SGR).

In a statement yesterday, KRC said effective February 16, cargo owners transporting a 20-foot container from Mombasa to the Naivasha ICD on SGR would pay $510 (Sh55,600) up from $480 (Sh52,300).

A 40-foot container weighing up to 20.9 tonnes will be charged at $725 (Sh79,000), up from $628 (Sh68,400) while a 40-foot container with a weight of 21 tonnes and above will be charged $775 (Sh84,400) from $728 (Sh79,300).

The new rates are however lower compared to what the railway freighter service was charging when it was commissioned in December 2019.

Then, the service was charging $600 (Sh65,400) to move a 20-foot container from Mombasa to Naivasha and $850 (Sh92,600) for a 40-foot container.

The rates were reduced in June last year to incentivise cargo owners to use the new service.

Kenya Railways said it has been engaging the business community and other stakeholders on freight rates in the lead up to the review of the official rates for containerised cargo to and from Naivasha ICD.

It added that the rates were cost-effective. “Goods destined for the hinterland, Uganda, Rwanda, South Sudan, Burundi, Ethiopia and the Democratic Republic of Congo can now be delivered cost-effectively to and from Naivasha, thus reducing the cost of doing business and spurring regional economic growth through trade facilitation,” said KRC Managing Director Philip Mainga.

KRC said it had maintained improvement on resources supply to support and sustain cargo evacuations from Mombasa, working with Kenya Ports Authority, Kenya Revenue Authority and Kenya Bureau of Standards.

This, it noted, can be seen in the increase in the amount of cargo ferried between Mombasa and the Nairobi ICD.

This is after it introduced double-deck trains and increased the SGR freight service’s cargo handling capacity. The double-deck trains carry 152 TEUs (20-foot equivalent units) per trip and have eased cargo backlogs.

Kenya Railways said Africa Star Railway Operation Company (Afristar), the SGR operator, has moved 186 trains from the port this month in an up direction that has so far delivered 18,972 TEUs to the Nairobi ICD.

The operator has maintained above eight trains, daily, delivering a minimum of between 800 to 1,000 TEUs.

“These efforts have positively enabled importers to receive their products and factory materials on time.”

Afristar recently introduced loading of bulk cargo on special open-type wagons covered with tarpaulins.

The SGR cargo service made Sh11.54 billion in revenues in the 12 months to December 2020, a slight drop from Sh11.86 billion that it made in 2019.

The service was unaffected by the Covid-19 and remained active despite the containment measures that affected other economic sectors, only registering marginal declines in the months between March and June.

The SGR passenger service however took a hit following measures such as cessation of movement to and from Nairobi and Mombasa counties.

The passenger service had revenues of Sh892 million over the year, about half of the Sh1.7 billion it earned in 2019.