The Standard Gauge Railway (SGR) will get Sh901 million from the exchequer in the new financial year starting July 1, to fund the completion of its passenger ticketing system and an integrated security system.
“The operations and maintenance of the standard gauge railway has been allocated Sh901 million from the Railway Development Fund for an integrated security management system and completion of the passenger ticketing system,” the Budget Committee of the National Assembly disclosed in a report. It did not give details of the ticketing and security system projects. The management of Kenya Railways Corporation—the agency under which SGR falls—had not responded to questions over the matter by the time of going to press.
“This (allocation) implies that the standard gauge railway is supported by the taxpayer, which is an indication that the project is struggling to break even six years after the operationalisation of the passenger and freight services,” the budget committee added.
The SGR train service, popular as Madaraka Express is yet to break even seven years since it started operations, leaving the train to heavily rely on the exchequer to fund daily operations and to pay the Chinese loan that was tapped to fund the project.
Kenya tapped a $3.75 billion (Sh489.71 billion at current exchange rates) from the Chinese lender to fund the construction of the railway from Mombasa to Nairobi and later to Naivasha.
Besides paying the loan, taxpayers have also been footing the operational costs of the Madaraka Express as the train struggles to break even.
Operating costs of the SGR are not readily available, although past documents tabled in Parliament showed it cost about Sh18 billion to operate the passenger and cargo trains, with fuel taking a huge chunk of the money.
The SGR made a total of Sh79.72 billion between 2017 and the end of last year, with revenues from the freight trains accounting for 84 percent of this or Sh67.09 billion.
However, the train has been unable to self-fund operations and is also yet to start paying the loan that the Treasury procured from the Exim Bank of China.
