Review rates plan to make the SGR viable – Business Daily
SGR cargo train at the Nairobi terminus station in this photo taken on April 27, 2019. PHOTO | JEFF ANGOTE | NMG
The presidential directive issued on Tuesday that all cargo clearance revert to the Mombasa port has brought back to the table the question of the viability of the standard gauge railway (SGR), which majorly depends on evacuating cargo to the inland depots for revenue.
Presumably, clearing cargo in Mombasa will bring truckers back into play in the fight for tonnage, as it will now not be mandatory to move cargo to Nairobi using the railway.
It is, however, important to consider that the cargo business is the primary enabler for the railway to pay off part of the considerable debt incurred in its construction.
The alternative, should the railway become unviable, is for the taxpayer to foot the entire bill. There are also other factors to consider, including the indirect cost of increasing the number of trucks on our roads. These heavy vehicles cause damage to roads and contribute significantly to accidents on the major highways.
This is not to say that the SGR ought to be unfairly protected against competition. It’s a reminder to the railway’s managers that they must make it competitive in the market by charging the right rates for carriage.