ECONOMIC DECAY

SGR mandatory haulage order is 'killing us'

On October 3, Transport CS James Macharia met Coast politicians and suspended the directive.

In Summary

• While Transport CS ostensibly lifted the order, the directive is still in force on the ground. Protesters want it withdrawn completely, not just suspended.

• Harriet Muganda, a clearing agent, says Kenya is losing more than Sh139 million daily via the SGR.

For five consecutive weeks, transporters in Mombasa have held protests against a government order to haul cargo only via the standard gauge railway.

On Monday next week, the protesters have pledged to march to State House Mombasa to petition President Uhuru Kenyatta to withdraw the directive, which was issued in August by the Kenya Ports Authority and the Kenya Railways Corporation.

On October 3, Transport CS James Macharia met Coast politicians, led by Mombasa Governor Hassan Joho, in Nairobi and suspended the directive.

 

However, on the ground the directive is still in force, said Salim Mbarak, an expert in the freight logistics industry in Mombasa.

“The directive has only been suspended for Mombasa-bound cargo. All cargo destined for Nairobi and beyond is still being forced on the SGR,” Mbarak told the Star. 

He said for the directive to be fully suspended, the Transport CS should issue a circular to shipping lines, KPA, KRC, Kenya Maritime Authority, Kenya Revenue Authority, the Shippers Council of Kenya, Kenya International Freight and Warehouse Association (Kifwa), among other port stakeholders.

“We have not seen the circular. The directive has only been suspended by word of mouth. Therefore, it's only cargo destined for Mombasa that is allowed to be sent to local container freight stations. All other cargo beyond Mombasa is transported via the SGR,” Mbarak said.

Rail transportation is more expensive than transport by trucks.

We are not against the SGR. We only want it to be competitive. Let it compete with the truckers, let the importer choose their mode of transport.
Salim Mbarak, expert in 

“An importer pays up to $400 (Sh40,000) more when using the SGR, compared to the trucks. There are so many hidden costs when using the SGR,” he said.

“A truck will transport your cargo to your doorstep and the empty container is returned within three days. The train will take your cargo to Nairobi Inland Container Depot, where you have to pay for the last mile cost, take back the empty container to the ICD and they will take over one week to bring it back to Mombasa,” Mbarak said.

He said transporters have to pay upfront, but for local CFSs and truckers, you will pay after delivery.

“We are not against the SGR. We only want it to be competitive. Let it compete with the truckers, let the importer choose their mode of transport,” he said.

Mesh Abdul, a vehicle spare parts dealer in Mombasa, said the majority of them have closed their businesses.

Abdul, who is the spokesperson of the Fast Action Business Community, said the Transport CS should be charged with economic crimes.

“Businesses are closing in Mombasa. Banks, spare part dealers, container freight stations, transporters and truck drivers are all affected. The Director of Public Prosecution should open a case file against the Transport CS and all government officials involved,” Abdul said.

FABC includes the Kenya Transporters Association, Kenya Long Distance Drivers Union, Muslims for Human Rights, Haki Africa, the Dock Workers Union and the employees of Container Freight Stations.

All have pledged to continue demonstrating in Mombasa.

Salim Karama, the FABC chairperson, also said they will boycott the Mashujaa Day celebrations in Mombasa’s Mama Ngina Waterfront Park on Sunday, October 20, and instead hold a parallel rally at Tononoka Grounds.

Clearing agent Harriet Muganda said Kenya is losing more than Sh139 million daily via the SGR.

“This is a loss-making venture. We need to stop it,” she said.

Truck driver Joshua Tengia used to work with the UniGroup but his employment was terminated three months ago as there were no more containers to be moved by road from Mombasa to Nairobi.

This is a loss-making venture. We need to stop it.
Clearing agent Harriet Muganda

“I have no work now. What is happening is that transport companies are making very little money moving containers from the Nairobi ICD in Syokimau to locations within the Industrial Area because of the short distance,” he said.

“And if transporters make little money, then drivers also have to suffer,” he said, adding that the government ought to consider reviewing the SGR freight monopoly because road transport creates jobs for more people.

ECONOMIC DECAY

Last month, the University of Nairobi said use of the SGR freight services has a high negative impact on the society and economy of the Coast.

In a survey undertaken between August 27 and September 14 last year, UoN said Mombasa has now reached a point of “economic decay” because of SGR freight services.

The survey commissioned by Governor Joho and other Coast leaders showed SGR has had a negative impact on employment, security, health and societal bonds.

At least 8,111 people directly employed in the CFSs as truck drivers, clearing agents and suppliers in the supplementary business in transport are facing possible job losses.

Dr Ken Ogolla from UoN, who was the technical leader of the survey, said the research on the socioeconomic impact of the SGR should inform the national and county governments of the consequences of the project.

“We have established a very negative impact on employment, security matters,  health and related services, and the breakage of societal bonds because of the SGR operationalisation,” Ogolla said.

Protester Fatuma Said braved the mid-morning Mombasa sun to be in the street march that started at Buxton and ended at the iconic elephant tusks. She explained how her siblings' predicament caused her to join the demonstration.

We have established a very negative impact on employment, security,  health and related services, and the breakage of societal bonds because of the SGR. 
Ken Ogolla, University of Nairobi 

“I am here because I have a younger brother who lost his job and he’s now idle at home and I have to cater for his needs,” Fatuma said.

She said her 27-year-old brother used to work for a cargo clearing company until he was laid off.

Fatuma says she was compelled to join other protesters to pressurize the authorities to lift the directive.

Her story is similar to that of her colleague, Zeitun Azizi. She joined the protest because her sister lost her job.

“She no longer has a job because the clearing company she worked with had to close its Mombasa branch operations due to loss of business,” Zeitun said.

Fatma Abdallah has been running a transport, clearing and forwarding firm for more than a decade. Business had been good all along as she built her enterprise from the early days when she started with three workers. They increased to 35 with a fleet of six trucks.

 Now she says, “I've had to let 12 of them go."