The Standard Gauge Railway has managed to increase its revenue by more than double in the nine months to September 2019 as compared to the same period in 2018. The profits rose from Sh3.74 billion as of September 2018 according to Kenya National Bureau of Statistics (KNBS) to Sh8.82 billion in September 2019.
The growth has been accredited to revenue from its passenger and freight services. A bulk of the revenue was from SGR freight services which managed to soar from Sh2.6 billion last year to Sh7.54 billion as of September 2019. This can be accredited to the hike in the cost of moving goods after Kenya Railways moved away from a promotional tariff. Unlike under the promotional tariff whereby cargo owners parted with Sh25,000 per 20-foot container and Sh35,00 for a 40-foot, the new charges which took effect January 1ST 2019, cargo owners have been paying Sh50,000 per 20-foot container and Sh70,000 for a 40-foot container.
Despite being cheaper than transportation by road transport, the charges for handling the cargo at the Inland Container Depot in Nairobi make the cost go up.
Despite being cheaper than transportation by road transport, the charges for handling the cargo at the Inland Container Depot (ICD) in Nairobi make the cost go up. This highlights why there are still a large number of businesses preferring road transport to the SGR. On the other hand, passenger services saw a slight increase from SH1.12 billion in 2018 to Sh1.28 billion in 2019. The minimal rise was caused by a reduction in the number of passengers from 1.19 million people to 1.18 million people.
Despite this causing a 136% rise in profits, it was still short of the target of Sh1.5 billion a month that was set by the China Communications Construction Company. The target was part of the deal that Kenya had made with China when they borrowed Sh324 billion for the construction of the SGR back in 2014.
