Major businesses at the Coast will be hit hard following a new directive by the government to transfer all imported cargo from Mombasa to Nairobi through the Standard Gauge Railway.
On Friday night, the Kenya Revenue Authority (KRA) and Kenya Ports Authority (KPA) said all imported cargo will be transported from the port to Nairobi through the railway starting August 7.
"All imported cargo for delivery to Nairobi and hinterland shall be conveyed by SGR and cleared at the Inland Container Depot in Nairobi while all cargo intended for Mombasa and its environs shall be cleared at the Port of Mombasa," read part of the notice to the public.
The move will render hundreds of employees working in different Container Freight Stations (CFS) and clearing and forwarding agents in Mombasa jobless as more than 85 per cent of cargo would be cleared in Nairobi.
Different stakeholders in the industry have protested against the government's move, saying the mandatory rule violates the World Trade Organisation (WTO) agreement which call for free flow of cargo by the most cost-effective means. Kenya is a signatory to the rules.
Kenya International Freight and Warehousing Association (Kifwa) chairman Roy Mwanthi said the association is set to issue official complaint to the government to demonstrate their frustrations.
"The move has killed all CFSs and is the last nail to the economy of Mombasa as we expect hundreds of job losses," said Mr Mwanthi.
More than 20 CFSs that have invested Sh12.5 billion in the region and over 800 trucks that operate daily in Mombasa may not get business if the new directive is implemented, rendering thousands jobless. This is in addition to the lodges and restaurants that depend on the trucks not only at the Coast, but in other parts of the country where truck drivers and conductors eat and sleep.
Truck owners who have been the most hit since the introduction of freight train service over a year ago have decried loss of business, with some planning to resell their trucks.
"My members will lose big in the SGR project. Drivers, loaders and turn boys have lost jobs as most containers are collected in Embakasi, Nairobi. Majority of transporters will now be forced to move out of Mombasa as business here is no longer viable," said Kenya Transport Association chief operations officer Mercy Ireri.
Ms Ireri said SGR has brought a curse to the sector with conventional cargo owners in East Africa complaining of the delay of their cargo deliveries compared to when they were being ferried using trucks.
"The process of clearance at ICD in Nairobi has become tiresome and complex since they are yet to streamline the services hence it takes more days for clients to get their cargo in Uganda as compared to when it is transported using trucks from Mombasa. It takes at least two-and-a-half days to deliver cargo to Uganda using trucks but due to complex process at ICD, it can take more than five days for goods to reach the country," said Ms Ireri.
SGR, a flagship project of the Kenya Vision 2030, has been billed as the biggest transport infrastructure project in the country's history and is expected to haul close to nine million tonnes of cargo using railway to make a profit of Sh5.08 billion in a year, averaging Sh424 million earnings per month.
This is compared to 990,488 tonnes carried in the first year where SGR made a loss of close to Sh10 billion.
According to statistics, since the introduction of 100 per cent ex-hook railage in May this year, KPA dispatches at least 10 SGR cargo trains carrying more than 1,000 containers to Nairobi every day.
In January, they recorded 214 trains, February 172, March 184 while in April and May 203 trains which transported cargo to Nairobi while June recorded the highest performance of an average of 13 trains per day.
Most of the cargo transported from Mombasa according to records were hides, french beans, coffee and empty containers which has boosted the volumes transported.
KPA managing director Daniel Manduku said for the first six months, KPA has been carrying an average of eight trains per day from the Mombasa port to the ICD in Embakasi pushing its revenue to more than Sh50 billion in the month of July.
"The authority's half-year report on cargo evacuation showed that 1,197 trains transported cargo to Nairobi and the efficiency at the port has seen increased revenue collection hitting Sh50 billion in July. We have never collected such revenue since the authority was established," said Mr Manduku.