Explainer: Naivasha SGR tariffs

heKenya Railways Corporation (KRC) has introduced Mombasa-Naivasha standard gauge railway (SGR) freight service as it seeks to target transit customers to be part of its railway payment plan despite opposition from truck owners.

This means that that SGR Phase 2A cargo service is now operational.

Kenya Railways says it mostly targets landlocked neighbours such as Uganda, South Sudan, Burundi, DR Congo and Rwanda, even tough the charges are higher compared to road transport.

With the launch of the latest offering, the government hopes to shore up funds to pay the first instalment of the Sh324 billion SGR loan in January next year from revenue collected from rail services.

So how much will it cost importers to transport cargo to the Naivasha ICD once their goods land in Mombasa?

KRC will be charging about Sh60,000 to transport a 20 foot container from Mombasa to Naivasha while a 40 foot container will cost about Sh85,000 for up to 20 tonnes. Containers weighing between 21-30 tonnes will be charged Sh91,000.

The government has also introduced promotional rates to entice more exporters to use the service by charging half price for all loaded cargo from Naivasha to Mombasa which will cost Sh30,000 for a 20 foot container. KR will charge Sh42,000 and Sh45,000 for 40 foot containers weighing up to 20 tonnes and above 20 tonnes respectively.

All conventional cargo will be charged Sh2,590 per tonne for hauling from Mombasa to Naivasha.

Charges for transporting cargo from Nairobi to Mombasa will remain the same at Sh50,000 for a 20 foot container while a 40 foot container weighing up to 20 tonnes will cost about Sh70,000. Any container weighing above 20 tonnes will cost about Sh75,000.

It costs transporters Sh80,000, including VAT, to transport a 20 foot container from Mombasa to Nairobi by road.

Additionally, domestic traffic is charged using local currency whereas transit or Inland Container Depot traffic is charged in US dollars.

The minimum chargeable distance for all types of goods for up and down direction is 300 kilometres.

Kenya Transporters Association (KTA) chief executive officer Dennis Ombok said the latest service by Kenya Railways will continue to cripple the road transport sector and cautioned importers against being impressed by the new tariffs, claiming there are hidden charges.

"We cannot oppose the government's move but let importers know there are many hidden charges which are not declared. They include marshalling charges, last mile charges, among others," he said.