SGR Revenues: Two years after starting operations, the Standard Gauge Railway (SGR) is unable to meet its operation costs. New financial figures from China Communications Construction Company which operates the railway shows that revenues were not enough to meet the operation costs, which are estimated at Sh. 1.5 billion a month or Sh. 18 billion a year.
The SGR raked in sales of Sh. 10.1billion in its second full year of operations. It generated Sh. 8.4 billion in the year to June.
“Kenya Railways had budgeted to earn some Sh. 24 billion from the cargo service in the year to June, falling 65.56 percent below target. The below target performance was attributed to reduced limited storage capacity at the Embakasi Inland Container Depot (ICDN), minimum use of the Nairobi Freight Terminal that handles cargo not stored in containers and cost tariff,” says a report that appeared in the Business Daily on Friday.
The report on SGR revenues further says:
“The freight services formed the main economic justification for the $3.2 billion (Sh. 323.20 billion) that President Uhuru Kenyatta’s administration pumped into the project through loans largely procured from Exim Bank of China from May 2014.
Kenya Railways data shows the freight service moved 4,009,386 tonnes of cargo in the year to June against a target of 8,022,514 tonnes.
In the first full year operation to June last year, SGR made revenues of Sh. 2.4 billion, but this was based on a freight operations of six months.”