Kenyan government orders all ministries including third parties doing business with the state to use SGR as it struggles to get return on investment on $3.2bn project
Movement of any cargo between Mombasa and Nairobi by any other means shall now on require written consent from the Transport Principal Secretary
In a circular dated March 7 to the ministries, agencies and departments (MDAs), Head of Public Service Joseph Kinyua said “all cargo imported and/or exported by government agencies, including cargo for projects undertaken by third parties, must be moved on SGR” as the government moves to make its most prized infrastructure since independence profitable.
Movement of any cargo between Mombasa and Nairobi by any other means shall require written consent from the Transport Principal Secretary, Mr Kinyua says.
The MDAs are also required to declare the cargo being moved in the current financial year to the managing director of Kenya Railways and the Transport PS within 10 days.
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The orders comes on the back of another order by Kenya Railways last month which ordered importers based in Nairobi and beyond to start collecting their cargo from Nairobi’s Internal Container Deport (ICD) in Embakasi instead of the Mombasa port.
The government spent an estimated Sh23 billion on the upgrade of the Embakasi ICD, which now has the capacity to handle 450,000 20-foot containers annually and is keen to have return on investment.
Similarly the corporation last week scrapped free parking for motorists in a move aimed at increasing income from the Sh327 billion ($3.2bn).
Since its launch, in June 2017, the mega project has struggled to take off forcing the government to hike the train fare to demoting almost the entire Railway board.
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Its commercial freight services which was become operational in January and had been largely expected to surge up revenues has also stalled and struggles to get enough containers to haul between Mombasa and Nairobi and vice versa.
Kenya’s railway freight traffic has over the years been on a steady decline, plunging 9.3 per cent in 2016 to 1.429 million tonnes from 1.575 million tonnes in 2015.
To boost the uptake of cargo freight on the SGR, the Kenya Ports Authority (KPA) less than a fortnight ago slashed container handling charges for a 20-foot local container at the inland container depot (ICD) in Embakasi to Sh8,160 ($80) from Sh10,506 ($103).
It remains to be seen whether the latest raft of measures will leave the government books in a better shape.
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