Standard Gauge Railway Makes Sh10 Billion Loss in Its First Year of Operation

The Standard Gauge Railway (SGR), which was dubbed the biggest infrastructural project in the history of Kenya made a loss of close to Sh10 billion in its first  year of operation.

Figures from the ministry of Transport shows that the railway recorded a loss of Sh9.89 billion since it was launched by President Kenyatta in June, 2017, according to The Standard.

The Chinese-built project averaged a loss of Sh750.7 million per month in the 2017/18 financial year due to low cargo business, documents tabled by Transport and Infrastructure Cabinet Secretary James Macharia before National Assembly’s Transport Committee show.

Macharia said the government however estimates the railway will record a profit of Sh5.08 billion in the current fiscal year or a monthly earning of Sh424 million.

“Part of the reason we made the loss last year was that it was a bit difficult to convince people that the railway was good for their cargo businesses,” said Macharia.

“Also, we were in operation for only six months from June 2017 and we were only trying the waters.”
In 2014, Kenya signed a Sh324 billion deal with China’s Exim Bank for the construction of the modern railway between Mombasa and Nairobi.

Currently eight cargo trains are making trips to the Port of Mombasa daily and the government plans to increase them to 12 by the end of the year.

In a recent interview, Deputy President William Ruto confirmed that taxpayers have been coughing Sh1 billion per month as operation cost for the passenger train, Madaraka Express, raising questions on whether the project is sustainable.