Kenya Railways optimistic as rail revenues hit new high

The Star
09 May 2022 (Kenya)

Both cargo and passenger services recorded increased earnings last year.

Earnings from the Madaraka Express more than doubled to Sh2.2 billion from Sh896 million in 2020.

The increase in passenger traffic and revenue was buoyed by the easing of Covid-19 measures.

KenyaRailways is optimistic of a stronger performance this year as investment in the sector starts to pay off.

This is after both the Standard Gauge Railway (SGR) and Metre Gauge Railway(MGR) posted a strong performance in 2021 , with increases in revenues from both passenger and cargo services.

Earnings from the Madaraka Express more than doubled to Sh2.2 billion from Sh896 million in 2020, the Economic Survey 2022 shows. 

Those from cargo haulage on the SGR rose by 24 per cent from Sh10.5 billion in 2020 to Sh13 billion in 2021.

Similarly, revenue earned from passenger services on the Metre Gauge Railway (MGR) rose significantly from Sh83 million in 2020 to Sh234 million in 2021.

The number of passenger journeys by Madaraka Express more than doubled from 370,000 in 2020 to 921,000 in 2021.

The increase in passenger traffic and revenue was buoyed by the easing of Covid-19 measures relating to mobility coupled with the introduction of additional passenger trains for night travel.

Revenue from cargo transported on the MGR also rose, albeit marginally, from Sh1.114 billion in 2020 to Sh1.118 billion.

This, even as the volume of cargo transported via MGR declined marginally from 652,000 tonnes in 2020 to 644,000 tonnes during the period under review.

“This was mainly due to a decline in import volumes of steel, one of the main commodities transported using the MGR. Despite the drop in cargo haulage, there was a slight increase in revenue from MGR cargo stream from partly due to ferrying of high value cargo,” the survey by the Kenya National Bureau of Statistics (KNBS) states.

During the year, cargo throughput increased from 34.1 million metric tonnes in 2020 to 34.5 million tonnes in 2021, representing a growth of 1.2 per cent.

This came amid an increase in container traffic, by 5.6 per cent, from 1.359 million Twenty-foot Equivalent Units (TEUs) in 2020 to 1,435.3 thousand TEUs in 2021.

The number of ships docking at the Port of Mombasa rose from 1,621 in 2020 to 1,635 in 2021.

The volume of imports handled at the Port of Mombasa however decreased slightly from 27.7 million metric tonnes to 27.3 million metric tonnes in 2021.

Export volumes on the other hand increased by 9.7 per cent to 4.6 million metric tonnes.

“The increase in exports is partly attributed to increased exportation of iron ores and titanium,” the survey states.

Freight transport through the SGR increased from 4.4 million tonnes in 2020 to 5.4 million tonnes in 2021, while passengers through SGR increased from 806,000 to 1.9 million in 2021.

The number of passenger journeys by MGR more than doubled from 1,899 thousand in 2020 to 4,498 in 2021 which came with an upsurge in the revenues.

This is mainly attributed to easing of Covid-19 containment measures in the country, continued revamping of Nairobi Commuter Rail (NCR) services through the full operationalization of 11 Diesel Multiple Units (DMU), and the introduction of new routes to Limuru and Lukenya.

“The re-introduction of the Nairobi - Kisumu Safari Train in December 2021 partly contributed to improved revenue in the MGR passenger service,” Kenya Railways led by managing director Phillip Mainga, has noted.

During the year, Kenya Railways undertook various construction and rehabilitation on the MGR network.

Up to 23.35 kilometres of MGR railway line link between the Inland Container Depot (ICD) Naivasha and Longonot were constructed.

Rehabilitation projects included the 465 kilometres Longonot to Malaba line, 216.7 kilometres Nakuru to Kisumu line, 77.8 Kilometre Gilgil to Nyahururu line, 69.05 kilometres Kisumu to Butere line and the 65 kilometres Leseru to Kitale line.

Fuel sales for rail transport almost doubled from 1.14 million tonnes in 2020 to 19.4 million tonnes in 2021.

The value of output from the railway sub-sector grew by 31per cent from Sh12.6 billion in 2020 to Sh16.5 billion in 2021.

The revival of the old Metre Gauge Rail to Kisumu and the link to Mombasa through the SGR is expected to boost trade in the country and with neighbouring countries.

Local traders and industries are hoping to continue benefiting from the projects with the Kenya Association of Manufacturers (KAM), Kenya National Chamber of Commerce and TradeMark East Africa terming the infrastructure as a "game-changer".

The rail and the upgraded Kisumu Port are expected to boost exports and imports through the Lake Victoria transport network mainly between Kenya, Uganda and Tanzania.

According to KAM, the revival of the old rail is significant for the local manufacturing sector as it opens up Rift Valley, Western and Nyanza regions, and increases connectivity with other parts of the country, particularly Nairobi and Mombasa.

Source
https://www.the-star.co.ke/business/kenya/2022-05-09-kenya-railways-optimistic-as-rail-revenues-hit-new-high/