SGR five years on: How the railway has impacted business in various towns

After its commissioning by former President Uhuru Kenyatta on May 31, 2017, the Chinese-funded Standard Gauge Railway (SGR) was touted to be a game-changer in the transport industry.

It was expected to reduce travel times between the port city of Mombasa and Nairobi. Towns along the corridor benefited massively during the construction of the railway line with many residents getting jobs on the sites.

However, we travelled back to find out how they are fairing, 5 years after the project was completed.

There are some towns along the SGR line like Miyasenyi that are yet to benefit fully from the SGR line. Passing through here, however, looking at other towns like Kibwezi, Emali and Voi their fortunes have changed quite a bit.

Emali town is a few minutes before the first train of the day arrives at the station. Passengers travelling to Nairobi are waiting for the train. But before it gets here, we caught up with Pius Mulei, a resident of Emali to understand why he prefers using the SGR over road transport and if the train has had any effects on the town.

“I use the SGR because of the reliability and the convenience that comes with it. The train has impacted positively on the fortunes of the people living here and the whole town has changed,” said Mulei.

“We have seen a lot of new buildings come up around the town over the last 5 years. The local people here have gotten employment as well as a result of this railway project.”

For Shelia Ndunge, her preference for the railway is due to the fewer hours and money she spends commuting.

“I prefer travelling with SGR while going to either Mombasa or Nairobi the journey is less than two hours and I pay very little money. We prefer SGR over other modes of transport. Time is of the essence, you can go to Nairobi from Emali, get your products and come back within the same day because of its efficiency,” she said.

Some 204km away from Emali town is Voi. Here we see a more vibrant town with many businesses operating. We meet up with Ann Wambui who operates an electronics shop.

“Before, it took me two days to go to Nairobi to get supplies for my shop. That means that when I close for longer I lose customers and avoid doing that as much as possible,” she said.

At the Mombasa port, this is where the journey on the SGR terminates. Stakeholders at the port are happy with the recent pronouncements by President William Ruto to revert port operations back to Mombasa from Naivasha.

Clearing and forwarding agents here say that this will provide importers with options when it comes to selecting the mode of transport for their containers.

 “The port operations coming back to Mombasa will bring back business. Most of our businesses that were closed have started reopening. The SGR and trucks on the road can co-exist together because this means that the clients will get options and we have seen most of them preferring the SGR,” Rajab Hamisi of Polo Auto Freight Forwarders says.

Kenya's SGR trains ferried 1.74 million passengers in the first nine months of 2022, up more than a quarter as compared to the same period last year, according to the Kenya National Bureau of Statistics (KNBS).

However, according to economist Reginald Kadzutu, there is a lot more than the government needs to do to ensure operational efficiency when it comes to the SGR.

“The government needs to ensure that they capitalise of that infrastructure. Ferrying passengers is not enough to cover the bill of construction. They need to make it more competitive and attractive to customers,” Kadzutu says.

In October 2022, the then-incoming Transport Cabinet Secretary Kipchumba Murkomen told a Parliamentary committee that Kenya would be seeking to renegotiate the SGR loan of USD 5 billion or Ksh.616 billion because the 20-year repayment period was simply unsustainable.

In that same month, a section of the media reported that Kenya had been fined by Chinese banks Ksh.1.312 billion in the year ended June for loan defaults.

“More needs to be done to ensure that they ferry more containers using the SGR, that means cutting down on all the bureaucracy that is experienced at the port and ensure that TEUs are shipped out faster,” Kadzutu adds.

As the Standard Gauge Railway marks its fifth anniversary, Kenyans, not only the ones living along the line are optimistic that their fortunes will change for the better.