Kenyan lawmakers deal a deadly blow to Chinese-built Standard gauge railway cargo line and vote to keep business moving on roads not rails

Standard Gauge Railway (SGR) freight service
  • Last Friday, KRA and KPA issued a joint public notice to importers requiring them to exclusively move their containers from Mombasa to Nairobi Inland Container Depot (ICD) through the SGR from August 7.
  • While the move was seen as a lifeline to SGR freight business it meant dealing a deadly blow road truckers and operators of container freight stations in Mombasa that operate like clearance ports.
  • On Tuesday, Mvita MP Abdulswamad Nassir vehemently opposed the directive saying the order was akin to turning Kenya into a monopolistic market and received overwhelming support from his fellow lawmakers.

The Chinese-built Standard Gauge Railway (SGR) cargo line will not be profitable any time soon.

Kenyan lawmakers have come to the rescue of importers and stakeholders in the transport industry after the recent assault by Kenya Revenue Authority (KRA) and Kenya Ports Authority (KPA) of their businesses. 

Last Friday, the two state agencies issued a joint public notice to importers requiring them to exclusively move their containers from Mombasa to Nairobi Inland Container Depot (ICD) through the SGR from August 7.

While the move was seen as a lifeline to SGR freight business, which has struggled to attract adequate cargo volumes since its inception, it meant dealing a deadly blow road truckers and operators of container freight stations in Mombasa that operate like clearance ports.

In May this year, it was revealed the Sh320 billion ($3.2 bn) Chinese built railway which snakes its way from Mombasa to Nairobi didn’t make half as much money as was earlier announced.

The Kenya National Bureau of Statistics (KNBS) revised downwards the earnings from the SGR in the first full year of operations by 44%, raising fears its books may have been ‘cooked’ to make it appear profitable.

On Tuesday, Mvita MP Abdulswamad Nassir vehemently opposed the directive saying the order was akin to turning Kenya into a monopolistic market and the directive will effectively kill container freight stations along the Mombasa-Nairobi highway, cripple transporters and force closure of warehouses, leading to massive job losses.

“This is an illegal directive purportedly signed by both KPA and KRA to compel all importers of cargo to use the SGR. They gave a reason that it is for the purposes of efficiency but we have raised the matter in Parliament and the mood of the House is that this is very wrong,” Mr. Nassir said at a press conference.

When he later at Parliament chambers, stood to sponsor a motion to stop the KRA and KPA’s directive dead on its tracks, Mr. Nassir received overwhelming support from his fellow lawmakers.

“We live in a country that has a liberalized free economy where you choose as long as the businesses you do are legal and how you do it is within the law you cannot be forced to do how certain people want.” Wajir West MP Mohamed Kolosh said when he stood to support Nassir’s motion.

Following the backlash, on Tuesday evening, the two state agencies beat a hasty retreat and announced they had postponed the poorly thought out directive much to the relief of importers and transport stakeholders.

This is not the first time; however, the national government has tried to force Kenyans from the roads to the rails in a bid to make the ‘overprized’ SGR economically viable.

Last year, the national government ordered all parties doing business with the state to use the standard gauge railway (SGR) freight services.

The orders came on the back of another order by Kenya Railways which ordered importers based in Nairobi and beyond to start collecting their cargo from Nairobi’s Internal Container Depot (ICD) in Embakasi instead of the Mombasa port.

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