Boom for traders as order on SGR effected
Daru-Salaam Restaurant in Mtito Andei. The owner says business is back as the number of truckers increase on the road.
For the last three years, Abdiwalas Mohamed, the manager of Daru-Salaam Hotel and Guest House in Mtito Andei, Makueni County, has been struggling to survive due to lack of clients caused by reduced number of truckers that were his main clients.
Mr Mohamed, who owns the 72-bed guest house, says his establishment was seriously hit by the introduction of standard gauge railway (SGR) freight service and the 2018 directive by the government making it mandatory to haul cargo from Mombasa to Nairobi via rail.
He says since the introduction of the order, his hotel which depended on drivers and their assistants has struggled to remain afloat.
“Despite investing heavily in the 17-acre land where we have restaurant, guest houses and petrol station, businesses which depended on trucks to survive, we were left with no choice but to cut down the number of staff since there was no job and income,” said Mr Mohammed.
But a directive by President William Ruto giving importers an option of transporting their goods using road or SGR has given Mr Mohammed and other traders relief and hope for the future.
“With the quashing of the order, we are now experiencing increased number of truckers and we hope both the hotel and rest rooms will be filled once again.”
“We are optimistic numbers will increase in the coming days due to President Ruto’s directive to return port services to Mombasa,” said Brian Juma, Midway Refreshments manager at Sparkle Centre, a mall in Mtito Andei.
The two are not the only businesses that depend on trucking, which were adversely affected by the introduction of SGR. A number of businesses in small towns along the Mombasa-Nairobi highway, such as Mariakani, Voi, Masimba and Kibwezi were depopulated, what had negative economic and social consequences .
A social and environmental study of the second phase of SGR by the University of Nairobi’s School of Business noted that the shift of business from road to rail affected a number of towns leading to major economic decline, while some even collapsed.
The report pointed that the implementation of the order requiring mandatory transfer of cargo through SGR to Nairobi saw Mombasa County lose Sh17.4 billion and 2,987 jobs annually.
That was due to closure of warehouses, container freight stations (CFS) and transfer of clearing and forwarding services to Nairobi and Naivasha.
Those who were directly affected were transporters who owned trucks and buses along the route as well as their drivers. The report estimates that there are about 25,000 drivers and assistants that operate trucks that move goods between Mombasa and Malaba, who were directly affected.
Mr Abdi Awale, a Mombasa transporter whose more than 20 trucks have been lying idle for years, is among truck owners who breathed a sigh of relief on Monday this week after Kenya Ports Authority (KPA) issued statement to shipping lines to allow nomination of cargo transport in Mombasa – the first time in three years.
Mr Abdi said the notice was the only impediment to the implementation of President Ruto's order to give freedom to traders to use any mode of transport to ferry their cargo from the port of Mombasa.
"I was forced to park most of my trucks. At least every week, 20 of my trucks were lying idle in my yard, we did not have business as all cargo was being nominated to be cleared in Nairobi and Naivasha and to be hauled by SGR," said Mr Awale.
He added, "Even our clients in South Sudan and other East African states were affected and were contemplating to shift to Djibouti but now we are happy we have back the business."
A spot check by the Sunday Nation revealed small-scale traders along the highway have started benefiting from the reverting of port services to Mombasa.
Mr Zipporah Syombua, a food vendor at Bonje rest centre, said there has been an increase in number of truckers since Tuesday last week, enabling her to increase food sales.
“For the past three years, I have been cooking a packet of maize flour to truck drivers in my kiosk but by Thursday, I am buying four packets as clients have increased. I hope to start cooking more than 10 as before SGR was introduced,” said Mr Syombua. Importers have been protesting high cost of transporting cargo through rail and the announcement was a relief to them.
Kenya Transporters Association (KTA) had led in condemning government’s move to force traders use SGR, noting there were hidden costs of using the service.
“It costs Sh80,000 including VAT to transport a 20-foot container to and from Nairobi using a truck but the SGR costs more than Sh90,000,” said KTA chairman Newton Wang'oo.
He said transporting a container to and from Nairobi using the SGR costs Sh50,000, but other charges are Sh5,000 handling fee, Sh25,000 for ferrying the container from the SGR to a nearby CFS, and Sh10,000 empty container return charges.
But as thousands of small-scale traders report improved income, experts have warned the directive is a double-edged sword to the economy and to the environment.
Northern Corridor Transit and Transport Coordinating Authority (NCTTCA) executive secretary Omae Nyarandi said the move is positive but there is need to ensure road safety is maintained.
He said for Kenya Railways Corporation (KRC) to remain relevant in the sector, it should review its charges and improve efficiency.
“Apart from social and economic issues where there has been job losses, KRC need to address last mile issues either by partnering with truckers and give one package to attract more users. But as we support use of trucks, we should consider the negative effects on roads and also increasing gas emission,” said Mr Nyarandi.
He added, “We are going back to where roads will be damaged and increase of pollution due to rise in number of trucks.”
The executive secretary said the creation of road side stations which the authority is advocating for will assist in reducing number of accidents in the northern corridor.
NCTTCA has intensified campaigns to train and create awareness to truck drivers along the corridor to reduce accidents and pollution.
In collaboration with the United Nations Environmental Programme, NCTTA hopes to train the truck drivers on techniques that lower fuel consumption and consequently lower the greenhouse gas emissions and accident rates.
According to statistics, Kenya loses some 4,000 people to road accidents annually, while some 14, 000 others nurse injuries sustained from the accidents.
