Uhuru to launch SGR cargo operations to Naivasha amid viability concerns

Uhuru to launch SGR cargo operations to Naivasha amid viability concerns

President Uhuru Kenyatta is expected to launch freight services on the recently launched Nairobi-Suswa Standard Gauge Railway (SGR) line on Tuesday to follow October’s launch of passenger services.

The launch is to be subsequently followed by the ground breaking of the 1000 acre sized Naivasha economic zone with the government moving to fast track the infrastructural support for the 120 kilometer line.

Constructed at an estimated cost of Ksh.150 billion, the Suswa line which serves as an extension to the 469 kilometer long Mombasa-Nairobi SGR phase is expected to further trim the reliance on road transport for cargo lifting to Kenya’s hinterland.

Cart before the horse?

The launch of the freight services comes ahead of the full completion of the Naivasha Inland Container Depot (ICD) with key installations on cargo clearance yet to be on boarded.

Further, the government is yet to fully develop social amenities such as housing, schools and hospitals to see the end of the line remain stuck in the middle of nowhere mirroring its now largely accepted phrase of the ‘railway to nowhere’ in social circles.

Transport allied economist David Nashon reckons the government is hard pressed to proof the need for the line to draw the analogy for jumping the gun on the early launch to cargo lifting.

According to Mr. Nashon, the State is at odds to retain potential investors even as it faces the burning need to bury the long-lingering questions on the line’s justification.

“What they would be looking for in an early launch is the boosting of investor confidence. The government would want to maintain the rail option remains to importers in the hinterland beyond Naivasha ahead of the fully operation of the line,” he said.

Already, Industrialization Cabinet Secretary Peter Munya has made receipt of the first entrant to the expected economic zone in the Danish Brewing Company.

The CS has maintained on progress to both the port and the economic zone with the latter being developed under Public-Private-Partnership (PPP) terms.

Cargo order

While the government has reiterated on the benefits accruing from cargo lifting by road to include the de-congestion of roads, the launch of the service is set to be a continuation of the road-truckers fears on forced SGR use.

This as the truckers remained locked in a battle with the Transport Ministry as they seek a permanent withdrawal on the mandatory use of the railway for transporting of cargo, a move which currently stands suspended.

The truckers fear the State will likely seek to impose the stick approach in line’s freight services implementation to further dent livelihoods derived from the historical road trucking.

“We are still seeing monopoly orders on the Nairobi-Mombasa SGR line and wouldn’t expect orders to be any different on the new line,” reckoned Roman Waema, a trucking business allied stakeholder.

Pressed by the need to find a return on investments, the Ministry of Transport has broken ranks with truckers by maintaining its forceful hand to have all cargo set for Kenya’s hinterland on the Nairobi-Mombasa line.

Moon shot

The fallout from the order on SGR use is incidentally against the closing grace period to the repayment of the project’s loan to the China Import-Export Bank (EXIM) as the redemption kick-off in January.

Consequently, cargo haulers feel they have become a soft target for the government’s monopoly order as freight services present better returns to the State in comparison to passenger services.

Revenues generated from the SGR have however previously been outpaced by operational costs to deem the project as economically nonviable on paper.

However, Transport Cabinet Secretary James Macharia has gone on record multiple times to defend the railway on sentimental value.

At the launch of the Suswa bound passenger service line on October 16, President Uhuru Kenyatta went further in his defense to lash out at critics saying the line has long-term held benefits for the country’s economic transformation path.

“Wale ambao kila saa kazi yao ni porojo kuwa mambo ni mabaya, shauri yenu, endeleeni kuteta, lakini kwa sisi tulio na imani ya kwamba tunajua mahali Kenya iwe miaka hamsini kutoka leo, tuwachiwe tuendelee na kazi” (For those making lots of noise on affairs falling out of order, you can go on and complain, but for us with the vision on where Kenya needs to be in fifty years from today, let us be given the room to work), he said.