Why concerns over Naivasha SGR port still far from over

Tuesday, June 30th, 2020 00:00 |
SGR cargo train

The government’s determination to use Naivasha dry port for seamless trans-shipment of goods destined to the neighbouring countries still faces headwinds with the cost element being an issue of debate.

An East African Business Council (EABC) webinar heard that trucking and logistics companies still prefer to use the road, which they say is a much cheaper alternative compared to using Standard Gauge Railway (SGR).

The meeting was called to discuss the impact that Covid-19 pandemic on the East Africa Community (EAC) transport and logistics sector. 

Players said though the Naivasha-based inland container depot (N-ICD) initiative was good, it should remain optional for now, as the protagonists tied down by binding contractual obligations. 

“The bigger issue is cost. There is no way businesses will spend $200 (Sh20,000) more to move containers from Mombasa to Naivasha.

The rates have to change,” said Auni Bhaiji, regional director, development and external affairs at Bollore transport and logistics.

Bhaiji  disclosed they held a meeting with authorities, which resulted in what he said was a small reduction from $600 (Sh60,000) to $400 (Sh40,000), a figure he said was still higher than using the road. 

‘Though the dry port has all the facilities in place, it is not economically viable to move heavy cargo (light 20 and heavy 40 feet containers) by rail from Mombasa.

The rates must also be adjusted before Uganda, Rwanda, Congo and Burundi can make it a route of choice,” he said.

Bollore has been using the Naivasha Inland Container Depot to haul cargo to Uganda and beyond, as part of the company’s Corporate Social Responsibility to reduce the spread of Covid-19 pandemic.

Logistics platform

Merian Sebunya, chairperson Uganda national logistics platform said SGR is a welcome addition that will create competition as a trade facilitator for Dar es Salaam, Kampala and Eldoret because it will drive down haulage prices.

“The problem is that it is mandatory yet we have contracts with international shipping lines which under international law, must be respected,” she said adding that it is the government and not the private sector that owns cargo.

Kenyan truck drivers, especially from Mombasa, are also opposed to the move, suggesting it has not only deprived them of their livelihoods, but that it is also unconstitutional. 

To drive their point home, they recently unsuccessfully lobbied parliament for the impeachment of Transport Cabinet Secretary James Macharia who has been pushing the government agenda.

Macharia said he was acting as directed by Presidents Uhuru Kenyatta, Yoweri Museveni, Paul Kagame and Salva Kiir.

The regional leaders had in their webinar virtual meeting agreed that in a temporary move to halt the spread of Covid-19 pandemic along the Northern Corridor through truck drivers, SGR should be used to transport goods to N-ICD for onward shipment to Uganda, Rwanda, Burundi and South Sudan.

More on Economy and Policy