Let gets' facts straight.
1) Trucks charge anything 80-100K (800-1000usd) to Nairobi including last mile delivery and return of empty container to the depot. Typically it would take you 1-2 days - 1 day to get through KPA port & congestion in Miritini & deal with police & weigh bridge and another day to actually drive the truck to Nairobi.
2) SGR use to charge promotional offer of 250-300K (now I think it's around 500-700usd). You still need to hire a truck to do last mile - around 15-20k - and return the container to Mombasa (150) or for SGR to return it (100USD). Give and take you total cost will be around 500+200+100 =800-1000usd. The last mile ought to similar take you 1 day.
3) So as you can see really SGR and Trucks are both competitive when dealing with containerized cargo - COST wise. The problem right now is congestion in Nairobi ICD that leads to delays and demurrage charges (KPA charges this to discourage the same delays). This is teething problem as more and more cargo uses SGR - and the solution is to have more and more dry ports -- have one in Athi River, expand Nairobi one, have Naivasha one, and have Kisumu one. This is work in progress!
4) The same scenario with passenger services...it cost about the same with bus. The difference is SGR for both passenger and cargo is safe,more comfortable, faster, less prone to accidents, thieves, delays and name it.
5) Railways are meant to transport really heavy cargo. They are not competitive when transporting passengers or containers. Containers have max tonnage of around 28 because of road limits ! Railways are designed to carry cargo more than 70 tonnes!
6) Kenya SGR will start to make money and business sense when it taps into bulk cargo - and they already started that - there is a lot of cereals (wheat, rice, etc) that kenya imports, lots of clinkers, bulk fuel and such cargo that are needed in hinterland - Nairobi. This is where SGR will be competitive - because they can carry way more capacity cheaply and faster.
7) Kenya SGR is already a huge success if you consider it's operated for barely 1-2yrs now - and it's already nearly breaking even. There are already handling most of the teething problems. Bulk cargo terminal I heard is under construction - Naivasha is 90% complete and soon they will start on ICD - should be pretty easy for Chinese to just level some field - erect a fence and install marshalling equipment. For containers - they need to integrate with old MGR line - at least to Industrial area and most of Nairobi. That will lessen the pain of last mile.
8) Kenya SGR (KRA,KPA,TREASURY) need to STOP FORCING IMPORTERS and start behaving like a logistic provider. That mean taking the business that Bollore, DHL, Multiple and likes of Signon do - by talking to big clients like Bamburi, EABL and Millers - and offering TOTAL LOGISTICS operations. That may including extending railway line to big cement companies and maybe revamping the old MGR for others.
9) Magufuli SGR doesn't make any sense to me. Darsallem is most important city in TZ. Most of the cargo will end up there. Unless they develop minning industry in hinterlands of morogoro, arusha,mwanza - that railway IS DEAD ON ARRIVAL.
1) Even if there is no ICD congestion in Nairobi, there is no one intrested to pay for double handling
2)Ugandan business men have abandoned the SGR and that is a big blow since the profits are better the longer the journey
3)There is no bulk cargo to import except maize, rice and clincker that will kill our local farmers and industries.
4)This is a white elephant, even the chinese who have been stealing ticketing money have abandoned it
