SGR cargo trains drop to half as the pandemic choke trade

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The number of cargo trains on the Standard Gauge Railway (SGR) has decreased immensely in the year to April due to pressure on the world market as well as restrictions implemented on the port because of the coronavirus.

According to data from Nairobi Inland Container Deport (ICD), the number of train carrying cargo from Mombasa to Nairobi fell from ten in the first quota of 2019 to six this April.

“Activities are quite slow here at the ICD, and we are worried that revue targets will be quite hard to achieve with the reduction in the number of trains we receive here. Ordinarily, we do 11 to 12 trains per day, now it drops to four on some days,” said an official of Kenya Revenue Authority based at the ICD. 

With the current rate of cargo transportation, the revenue created may go lower than the recorded Sh11.86 billion last year. In 2019 the volume of cargo ferried was 4,159 tonnes, a sharp 43.5 increase from the previous year.

However, the 2019 earnings were below the target of Sh24 billion from the cargo service. The reduced limit storage capacity highly attributed this performance at the Embakasi Inland Container Depot (ICDN.

“There were several instances when the ICDN facility was congested, which impacted heavily on turnaround of resources and thus contributing to the movement of low volumes,” Kenya Railways wrote on the December report.

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Anthony Kiratu is the Founder of Finsolutions. He is a financial analyst with over 5 years experience in research, investment advisory, valuation and financial modelling. Anthony is a member of the Institute of Certified Investment and Financial Analysts and Institute of Certified Public Accountants of Kenya. He is passionate about development of African Capital Markets through training of investors and dissemination of information for sound financial and investment decision making process. He is also a part-time lecturer in the Certified Investment and Financial Analyst course in the subjects of International Finance, Portfolio Management, Equity Investment Analysis, and Fixed Income Securities. Email: anthony@finsolutions.co.ke Contact: +254 780216631

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