REBOUND

SGR cargo business recovers from Covid impact

Currently operating an average of 11 trains from a low of five

In Summary

•Despite disruption on the global supply chain and shipping, SGR cargo operations is likely to hit a new record this year.

•Passenger business has however been affected by the Covid-19 pandemic.

A loaded SGR cargo train leaving the Port of Mombasa on January 4, 2017/FILE
A loaded SGR cargo train leaving the Port of Mombasa on January 4, 2017/FILE
Image: /FILE

The Standard Gauge Railway(SGR) cargo business recorded improvement in the third quarter into November with volumes expected to hit a new level this year.

Data from the operatorAfrica Star Railway Operation Company (Afristar)shows recovery in the third quarter (July-September) as volumes closed at 115,760 TEUs (Twenty-Foot equivalent Unit)–the approximate unit of measure of a container.

This is up from 100,284 TEUs hauled on the rail, from the Port of Mombasa to the Nairobi and Naivasha Inland Container Depots, between April and June (second quarter).

 

The volumes were 96,294 TEUs in quarter one (January-March) when global supply chain shrunk on effects of Covid-19 , with Kenya reporting its first case within the period.

As of November 30, Afristar had transported a total of 389,412 TEUs.

“This includes 8,466 TEUs of dangerous goods, 13,876 TEUs of grain and 96 TEUs of essential Covid-19 prevention materials such as disinfectants, ethyl and alcohol,” the company says in its latest statistics.

The total number of SGR cargo trains between January and November were 4,521.

Kenya Railways Corporation notes the average daily cargo trains has increased to 11 from between five and seven in the first half of the year when Covid affected the economy, with disruption in the Chinese market (Kenya's biggest import source) leading to reduced imports mainly raw material and finished goods.

From March to June, we had low numbers. The situation was bad, at some point I remember we had only 35 containers on the ground to evacuate. Most ships were not moving during that period,” KRC managing director Philip Mainga told the Star.

Covid-19 cases at the port and reduced manpower at both Kenya Ports Authority and railway operations also affected cargo movement.

 

“We started recovering in July and today I can say we are operating on fully capacity,” Mainga said.

With three weeks to the end of the year, the operator is shy off last years volumes by less than 20,000 containers, meaning SGR cargo operations is likely to hit a new record this year, having moved a total of 412,892 TEUs last year.

Total volumes were 257,398 TEUs in 2018. It moved 12,986 containers in 2017 which was within the month of December when freight services were launched.

Between December 2017 and November this year, Afristar has transported 1.07 million TEUs, serving mainly manufacturers and businesses in Nairobi and transit cargo headed for western Kenya and neighbouring countries, mainly Uganda which is the biggest transit destination.

Meanwhile, passenger business on the Madaraka Express is slowly picking, having resumed full operations on October 3, after operating on 50 per cent occupancy since July to mitigate the spread of coronavirus.

Operations were shut in March to July when the government imposed a ban on movement in and out of the Nairobi metropolis, Mombasa, Kilifi and Kwale counties.

“As of November 30, over 337, 500 passengers have used the train since the resumption of service on July 13,” Afristar notes.

The average seat occupancy rate is currently at 90.9 per cent.

The Covid-19 interruption has denied the operator revenues this year, piling pressure on government which has a debt obligation to China for the project.

National Treasury is expected to negotiate for softer terms during this period where the economy has also taken a hit, with growth projected at a paltry 0.6 per cent.