SGR IS ABOUT TO START OPERATING IN NAIROBI AND MOMBASA

SGR project is almost done for Nairobi –Mombasa and within Nairobi which is expected to start operating soon in this year. Ministry of Transport and TSA says that will reduce traffic in Nairobi because it will be Rongai-Siokimau-to town. The plan is to make Nairobi a business hub with no traffic.

Impressive government follow-up is evident. When completed, it is expected to increase cargo trains speed up to 120kms/hr and passenger trains at 180km/hr. The rail trip from Mombasa to Nairobi will now take only four hours. Construction of the next phase Nairobi-Kisumu and Malaba part will commence “soon”.

The Kenya Railways Master Plan is a commendable initiative by the Kenya Railways Authority. It provides for another SGR as part of the Lamu Port South Sudan Ethiopia Transport (Lapsset) corridor from Lamu to Addis Ababa through Moyale and to Juba through Lokichogio.

To be extended to West Africa as part of the Great Equatorial Landbridge, connecting the East African coast to the West African Atlantic coast.

The benefits of the successfully implementing SGR are attractive to the economy. However, it is always important to keep reviewing the objectives of any project, even as it progresses.

As part of the logistics chain, its users based on time, cost and place benefits will practically measure SGR efficiency. In other words, the time it takes to transport goods from say Mombasa port to Nairobi, the total cost and the coverage of the current and potential economic engines.

From a user perspective, following are some of the main expectations and concerns that will determine public perception of the SGR project success: Timeliness of the project completion and commissioning, enabling earliest use of this high capital investment.
This should be measured in terms of the project deadlines originally given in comparison to how other similar regional projects have fared, for example, the Djibouti-Addis- Ababa rail construction, which is due for completion this year.

Many Kenyan and regional importers and exporters have already inbuilt our SGR into their 2018 logistics model. Any delay in completion would imply delayed cost savings to them.

Upon commissioning, speed of the block trains and the schedule options and number of the block train per day will determine how traders can reliably inbuilt more of the rail system into their supply chain to achieve “just in time” logistics. A reliable efficient SGR will reduce user inventory costs and enhance competitiveness. Timeliness of intermodal systems, that is, how fast it would take for a container to interchange from one mode of transport to the rail and vice versa is also crucial.

Competitive logistics demands speed and timeliness on the entire chain with seamless interchanges. State of the art modern cargo handling equipment should be in place at all railroad interchange points to ensure seamless transfer from one mode of transport to another.

Do we have the plan and action already for the appropriate railway sidings to deliver and collect cargo from the main engines of the economy such as industrial zones, major manufacturers and storage locations? What part of the bigger integrated transport master plan will the SGR play in regional intermodals?

While the master plan serves the Lake Victoria region, it falls short by not providing a link to Lake Turkana. Turkana region, which is rich in minerals, fish and cattle for export, if served by a rail linked lake port will serve southern Ethiopia and northern Turkana by lake and open up a new economic zone.

If this is not factored early enough, the SGR gains between Mombasa and Nairobi will be eaten up by the interchange costs of final leg to the importers or exporters site through the road transportation costs.

The SGR project is expected to reduce rail transport costs from $0.20 to $0.08 per ton per kilometer. This cost saving is generated by use of block trains with economies of large scale compared to narrow gauge and road transport.

It costs about $1,700 to import a 20-foot container by sea from China to Mombasa, a distance of about 13,000km, but it costs about $1,000 inland to Nairobi, distance of about 500km.

A standard container ship to Mombasa has an estimated 2,300 twenty-foot equivalent units and even though not all containers on that ship are discharged in Mombasa due to other ports rotation, the economies of scale in sea transport are evident, hence the lower per kilometer cost than road and rail transport.

So how can we maximize the economies of large scale in the rail and pass that saving to the consumer? In the US where cargo rail transport is most efficient, “double stack” is key word. One container on top of another to maximize on the capacity per block train. azIs this possible in Kenya?

It will depend on our integrated transport policy – whether road bridges and rail tunnels are built with double stack in mind. Road bridges and footpath flyovers must take this into account to accommodate the height of the double stack train below. This way we will enhance the efficiency of our freight trains and also allow for high “double decker” passenger trains.

Kenyans are hardworking, resilient people. Give them the infrastructure and they will generate business, jobs, exports and foreign exchange, and yes, more tax revenue for the government. Let’s get it right.