Rail transport makes a comeback

When Kenya Railways Corporation ran out of funds to run and maintain East Africa’s oldest railway network, the government was forced to change tack.

It allowed the parastatal in 2005 to partner with private firms to inject the billions of shillings in capital that was needed to rebuild its ageing infrastructure and wagons.

The volume of cargo at the port of Mombasa has been rising, but the amount of goods moved on the railway has been declining because of the system’s inadequacies. No new railway has been built in Kenya
since the late 1901 when the line linking Mombasa and Kampala was first built.

Inefficient rail service has pushed the movement of bulk cargo onto the roads, significantly raising the cost of maintenance.

Over the next five years, Rift Valley Railways (RVR), the Kenya-Uganda railway line concessionaire operating freight and passenger rail services between Mombasa and Kampala, will spend billions of shillings to make bulk rail transport more efficient in East Africa again.

Brown Ondego, former RVR group chief executive officer, said that after the railway system is fully revamped it will be more reliable, with increased delivery speeds. This will increase cargo volume making the venture profitable in the long run.

“One of our main objectives is to boost cargo volumes by increasing the capacity of our rolling stock,” he said, adding that the group plans to rehabilitate existing wagons and locomotives, as well as to purchase
some new rolling stock.

Mr Ondego said RVR is implementing a sustainable business and investment plan that includes a fiveyear capital expenditure programme to rehabilitate infrastructure and rolling stock. It is expected to cost approximately Sh24.4 billion ($287 million).

An estimated Sh7.65 billion ($90 million) will refurbish existing locomotives and purchase new ones. Rehabilitation and purchase of new wagons is expected to cost approximately Sh9.35 billion ($110 million).

The modernisation of rail infrastructure will cost approximately Sh5.27 billion ($62 million), while information technology and other turnaround projects will require an estimated Sh2.125 billion ($25 million).

“This should translate into quality and reliable services to our customers and the multiplier effect over time will be a reduction in the cost of transport,” said Mr. Ondego.

He added that volumes at the port of Mombasa are projected to double in the next 10 years, making it necessary for the railway line to be efficient.

Earnings
Port volume in Mombasa jumped to approximately 19 million metric tonnes in 2010 from approximately 7 million metric tonnes in the 1980’s. But amounts moved by rail dropped to about 1.5 million tonnes from
4.8 million tonnes over the same period, according to TransCentury, a part owner in RVR.

Revenues earned from the rail system have not been consistent, dropping to Sh4.1 billion in 2010 from Sh4.3 billion the previous year. In 2008, revenues totalled Sh4.27 billion; Sh4.4 billion in 2007; and Sh4.18 billion in 2006, according to the Economic.

Survey of 2011. On the other hand, earnings from freight traffic on roads have almost doubled over the same five-year period to Sh164.6 billion in 2010 from Sh90.4 billion in 2006.

The neglect of Kenya’s railway transport has been so bad that the sector’s contribution to the economy declined by more than half over the five-year period from 2006 to 2010, from Sh4.55 billion at the beginning of the period to to Sh2.2 billion in 2010.

The road transport sector’s contribution to the economy grew by 62 per cent to Sh331.9 billion over the same time. Mr. Ondego said the port of Mombasa handles an average of 20 million tonnes annually compared to the 3.5 million handled by the Dar es Salaam.

Rail transport is more economical than road transportation for bulk goods. Container rates from Mombasa to Kampala depend on the weight of the container being moved.

Light containers—up to 14 tonnes—cost Sh153,000 ($1,800). Medium weight containers, which range between 14 and 23 tonnes, cost Sh178,500 ($2,100).

Heavy containers—between 23 to 30 tonnes or containers which are 40 feet long—cost Sh254,320 ($2,922). According to RVR, on average road transporters charge a flat rate of Sh263,500 ($3,100) per container to the same destinations, making the transportation of heavy goods more cost effective using the railway.

“The cost of transportation is much more on the roads than on the railway,” Moses Maina, the deputy secretary of road transport at the Ministry of Transport.

Mr. Maina said that the country had not invested in the railway for a long time, which has pushed the transportation of bulk goods to the roads.

Increased transportation of goods by road, coupled with dishonest transporters who overload trucks, has reduced the lifespan of the country’s roads, pushing up maintenance costs, he said.

The Nairobi-Nakuru highway, for instance, which is used by trucks moving goods from Mombasa to Kampala, has developed uneven surfaces in some areas caused by overloaded trucks.

Over the past few years, the government has increased allocations for the repair of existing and building of new roads. But the establishment of an efficient rail transportation network will be more beneficial for
the overall economy for the movement of bulk goods, especially considering road maintenance costs and the time lost in unnecessary traffic jams.

Moving of bulk goods by train will mean fewer trucks on the roads, reducing congestion. It will also probably reduce accidents.

On average, 44 trucks are required to carry the cargo hauled by a single train. The larger carriage volume of the train allows the simultaneous transportation of a large volume of cargo within a short
time period, according to RVR.

The rail company plans to operate cargo trains according to a fixed time schedule, allowing the shipment goals to be met in a well-planned, precise, consistent manner.

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This article first appeared on Businessdailyafrica.com