Very correct.
The earnings of Kenya's SGR were below expectations ,but also unrealistic.No one except those who are highly uninformed expected the SGR to be profitable in its first year. The SGR of Kenya has a lot of potential in the sense that, compared to the Ethiopian one, it s a China Class 1,meaning it can handle a lot of freight.
In the first year, the SGR transported around 5 million of the over 30 million tonnes handled at the Port of Mombasa.Starting this year, importers, at least Kenyan ones who expect to deal with the Government in terms of supplies and tenders can only transport via the SGR(Contrary to previous reports that ALL traders are being forced to use the SGR. If you are an importer and you do not do business with the Government, you can use whichever mode of transport you wish) and that alone may double the amount of freight transported.
The bottleneck right now is at Embakasi where the Nairobi ICD is facing serious congestion issues.That is not surprising as freight grew suddenly by nearly 700%.That is why Naivasha's ICD is important.Transit cargo destined for Uganda, Rwanda and South Sudan will be collected and cleared at the Naivasha ICD,where importing nations can opt to choose to continue with rail in the case of Uganda or road for the rest.This will cut travel time by a significant margin as the train will take only around 5 to 6 hours from Mombasa to Naivasha, then the Ugandans ,Rwandans and South Sudanese can do their clearing there(instead of the congested Mombasa) and then opt to choose a mode of transport.This will cut the time for transport by several days given how trucks move slowly from Mombasa to Kampala, Kigali and Juba. Starting the journeyfrom Naivasha willl mean a much shorter travel time.
Kenyan importers will continue to face the issue of slow clearance as they have to deal with 23 agencies at Embakasi.This may change in future as the proposal to kick out 18 of the 23 agencies and leave just KPA,KRA,KEBS ,Kenya Railways and the Licensing board of the product e.g Pharmacy and Poisons board for Medicine imports has been endorsed and only KEBS, KPA and Kenya Railways will operate at the Port.
Transit importers will not as they are not subject to Kenyan agencies beyond KPA,Kenya Railways and NTSA.
As for passengers, Kenya Railways's SGR transported over a million passengers as compared to Ethiopia's 168,000,so clearly, the Kenyan SGR is performing far better on the passenger side.
As for the debt, Kenya has the Railway Development Levy which has been charging at 1.5 percent of the value of imports excluding imports from EAC. It has been in place since 2013.
The 30 billion the National Land Commission used to compensate land owners for the Nairobi-Mombasa line ALL CAME FROM THE RDL .Not a single cent came from the Chinese.
Since 2013, the Railway Development Levy has collected sh 95 billion
Money collected over the period is charged on imported cargo and footed by buyers.
www.nation.co.ke
This is set to rise as this year, the Railway Development Levy has risen from 1.5 % to 2% thus we will be collecting not less than sh 30-34 billion up from 25.5 billion collected last year.(Our imports were $17 billion in 2018. 2% of that is $340 million but I give the figure of sh 30 billion due to EAC imports being excluded from the RDL)
Given that we have to pay the Chinese 26 billion in both interest and principle every year, I think we have got it covered. Kenya thus has a tax we have been paying to cover the cost of the railway.This panic of the debt is unwarranted.Instead the focus should be on ensuring the money collected is not looted, which has happened on the Nairobi-Naivasha line where the NLC has overpaid land owners for their land , often by millions of shillings.That reduces the amount that is available for debt repayment.
As such Kenya is perfectly capable of paying for its own railway from a revenue perspective.
