We’re being forced to use ‘costly’ SGR, traders say
The Standard Gauge Railway should have been a boon for business. The $3.3 billion (Sh337.9 billion) line sliced hours off the journey from Mombasa to Nairobi.
But importers say their transport costs shot up by nearly 50 per cent when they used the rail due to extra fees, more time spent clearing goods at the congested Nairobi train depot and the need to send a truck to collect the goods from there.
These importers used to truck their goods in from the coast. But Kenya Ports Authority (KPA) says businesses based in Nairobi and upcountry must use the SGR because the port is contracted to supply it with a minimum amount of cargo.
“KPA has an obligation to feed the railway. We were the guarantors of the rail,” says KPA managing director Daniel Manduku. Hundreds of people hold weekly demonstrations in Mombasa against the mandatory movement of cargo by rail.
The contract between China’s Exim Bank, KPA and Kenya Railways requires KPA to provide one million tonnes of cargo to the railway per year, rising to six million by 2024.
But importers say they have been forced to use the line since October last year. The port confirmed the policy in August, but rescinded the order in October after protests.
Businesses say little has changed and they are still required to use the ‘more expensive railway’. Port authorities are diverting shipments to the new railway, said a Nairobi-based customs clearance agent. “You are made to pay for it whether you like it or not.” -Reuters