Nairobi – Mombasa train continues to make losses 18 month in

The SGR project is yet to achieve profitability. Kenya revised downwards earnings from the SGR in the first full year of operations by 44 per cent to Sh5.7 billion from the previously reported Sh10.6 billion.

It generated Sh4 billion last year against the initial announcement of Sh8.72 billion, almost a 50 per cent adjustment.

Kenya’s Sh81.67 billion debt to Beijing will account for a third of the Sh270 billion debt that will be due to foreign lenders in the 2019/20 financial year.

It was billed as the saviour of the choking Mombasa port traffic.

Eighteen months down the line, with a string of lost business and livelihoods, the standard gauge railway (SGR) cargo haulage continues to traverse the over 400-kilometre Nairobi-Mombasa stretch with each trip raking up losses.

It’s the same sad story for the passenger service which was to complement cargo haulage and charm the electorate.

Unknown to taxpayers, every time a train shuttles between the port city of Mombasa and Nairobi, it adds to the financial burden of the taxpayer even as the public debt pit deepens and widens.

Just last week, it emerged that Kenya had revised downwards earnings from the SGR in the first full year of operations by 44 per cent to Sh5.7 billion from the previously reported Sh10.6 billion, dimming hopes that the project will break even any time soon, even as its loan repayment starts to chalked up the country’s revenues.

“We believe SGR is economically viable. Note that in the first year of operation it earned Sh10.33 billion, which is close to the operating cost of Sh12 billion. It’s never easy for a railway project to achieve nearly break-even in a year,” Chinese ambassador to Kenya Wu Peng said last week.

RAIL HAULAGE

However, data from the Kenya National Bureau of Statistics (KNBS) paints a grim picture of the railway line, whose annual operating cost is Sh12 billion and whose cargo capacity is already at its peak, according to insiders.For instance, in the 16 months to April this year, cargo hauled via the SGR stood at 3.76 million tonnes with the month of April having seen the highest haulage of 318,848 tonnes.Kenya Railways Corporation has also cut back goods wagons to 203 as at the end of April from a high of 214 […]

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