Kenya Railways has slashed the Standard Gauge Railway (SGR) cargo tariffs, a move that seeks to woo cargo importers as well as make the Naivasha dry port economically viable.
Kenya Railways has reduced freight charges from $600 to $480 for a 20-foot container and from $850 to $680 for a 40-foot container.
According to Philip Mainga, Kenya Railways Corporation (KRC) Managing Director, the new rates will run for 90 days, with effect from 2nd June 2020.
However, the move has caused an uproar among the Kenya Transporters Association (KTA), saying it will frustrate truck owners, whose cost of transportation is different.
Business Daily reports that KTA’s recommended rates from Mombasa to Kampala are $2,400. However, most of the trucks are charging $1,900 as a flat rate for both 20ft and 40ft containers. In contrast, the Transport ministry’s rates from Mombasa to Uganda cost $2,180, comprising SGR from Mombasa to Naivasha and Road to Kampala.
Following a recent directive to shift all cross border transit cargo coming from Mombasa to the Inland Container Depot(ICD) facility in Naivasha using the Standard Gauge Railway, Ugandan businesses expressed displeasure at the directive.
According to Ugandan authorities, rail transport is more expensive than road transport. Therefore, the authorities worry that the extra cost will be passed on to the Uganda consumers by the respective importers.
This slashing of tariffs comes barely a week after the Court of Appeal ruled that the SGR contract is illegal. The court ruled that Kenya Railways’ (KR) failed to follow the set procurement laws. Further, the Court found fault in the feasibility study of the project by China Road and Bridge Corporation (CRBC).