SGR half-year passenger numbers down by 121,023 on higher fares

By wazup on August 16, 2024 Comments Closed / 46 views

Passenger numbers on the Standard Gauge Railway (SGR) fell by more than 100,000 in the first half of the year after the Kenya Railways Corporation raised fares by half to boost revenue.

The latest figures show that nearly 1.13 million tickets were sold in the six months, compared to 1.25 million in the same period last year.

The 121,023 or 9.68 percent drop in passengers was the first in the post-pandemic period, according to an analysis of Kenya Railways Corporation data.

In January, KRC increased fares on the Nairobi-Mombasa SGR by 50 percent to Sh1,500 from Sh1,000 for economy class seats, while first class seats rose to Sh4,500 from Sh3,000.

The increase in the cost of travelling on Kenya’s most expensive infrastructure since independence was “informed by changes in the energy and petroleum sector where prices of fuel have significantly increased thus affecting the cost of our operations”.

The strategy appears to be paying off as Africa Star Railway Operations Company (Afristar) reported a significant 35.16 percent jump in revenue from SGR passenger services to Sh1.85 billion in the half year from Sh1.37 billion a year ago.

Afristar, a subsidiary of China Road and Bridge Corporation, operates and maintains the line, which runs from the coastal city of Mombasa via the capital Nairobi to Suswa near Naivasha, under a 10-year concession from 2017.

This came amid mounting pressure on KRC to start repaying the $3.75 billion (Sh487.5 billion under prevailing dollar conversion rates) Chinese loan taken to build the line, the most expensive infrastructure project undertaken in post-independence Kenya.

The National Treasury has revealed that Kenya Railways is yet to start repaying billions of shillings spent by taxpayers on servicing the loan Kenya took from China’s Exim Bank.

The parastatal in June last year accounted for nearly 60 percent of the Sh983.20 billion loan arrears the Treasury has taken on behalf of strategic state enterprises over the years.

“The total outstanding on-lent loan arrears for SOEs was Sh983,204 million as at end of June 2023; out of which Sh566,120 million, accounting for about 57.6 percent of the total amount, is on-lent to Kenya Railways Corporation in support of the Standard Gauge Railway (SGR) Project,” the Treasury said in the Annual Public Debt Management report for the financial year ended June 2023.

“Kenya Railways Corporation is yet to start repaying the loan.”

Details of when and how KRC will repay the SGR are shrouded in secrecy, as is the loan agreement Nairobi signed with Beijing to build the most expensive infrastructure project since independence.

Under the previous government of Uhuru Kenyatta, Kenya built the nearly 700-kilometre SGR line between Mombasa and Suswa, near Naivasha, with China financing more than 90 percent of the estimated $3.75 billion cost.