Manufacturers shun railway over cost, flexibility concerns

Despite the availability of the Nairobi-Naivasha standard gauge railway (SGR) to ease the transportation of goods along the key corridor, a new study reveals that Kenyan manufacturers surprisingly continue to favour trucking for transporting goods across the country.

The study, published recently by the manufacturers’ lobby says trucking is still preferred due to various reasons including cost, flexibility, and limitations of the SGR.

Consequently, they want the Ruto-led Kenya Kwanza administration to lower the costs of ferrying goods via the SGR to incentivise more firms to use the SGR but also build and revamp additional infrastructure to make the railway functional.

The Chinese-built railway ends in Naivasha, where the government plans to build an industrial park to encourage rail freight on the new line, but so far has not done so.

“The government through KRC (Kenya Railways) should consider reviewing the SGR rates downwards to match the competitive road transport rates to encourage more importers to use the SGR when transporting containers into the mainland,” says the Kenya Association of Manufacturers (KAM) study released last week.

“Trucks can offer last-mile connectivity to importers by transporting the imported goods from the ICDs (Inland Container Depots) to importers’ premises. Priority should also be put into the construction of meter gauge railway (MGR) and SGR sidings as well as the rehabilitation of railway lines in industrial areas to enhance last mile connectivity and reduce the cost of transport.”

“Most importers or manufacturers who prefer to use SGR services to rail their containers from the Port of Mombasa to ICD in Nairobi and Naivasha usually face the challenge of last mile connectivity,” says the new study. “This is because the truck turnaround time at the ICDs is high compared to the expectation of the importers that it will take the minimum time to have their shipment loaded onto the trucks and gate out of the depot.”

According to manufacturers, resolving the bottlenecks faced by the Railway will “reduce the cost of transport and logistics in favour of industries, who will be compelled to pass on the benefit to the consumers once their overall production cost is reduced.

The Ruto government said it remains determined to secure a deal with China to construct the Chinese-built SGR to Malaba, at the Kenya-Uganda border. Kenya’s announcement came after high-level discussions between President William Ruto and China President Xi Jinping in Beijing failed to bear such a deal or an extension agreement.

Transport Cabinet Secretary  Kipchumba Murkomen however said earlier that Kenya will maintain its ongoing engagement with Beijing to secure support for the expansion of the SGR, starting from Naivasha and extending to Malaba, with the ultimate goal of reaching Malaba.

“I appreciate the willingness of the Chinese Government to work with us to find the most appropriate framework for extending the SGR from Naivasha to Malaba, and after that to Kampala and beyond,” he said.

Kenya reckons extending the railway to Malaba will help traders move cargo seamlessly by rail from Mombasa port to landlocked countries.

Uganda adopted a wait-and-see approach when Kenya built the SGR line from Mombasa to Naivasha at a cost of about Sh327 billion.