June 6, 2017 my hassle was taking me to Mombasa. It was an
opportunity for me to save a coin and take the promotional offer to ride
on the SGR train. I was at the CBD Railways terminus for a free bus to
connect to Syokimau, the Nairobi SGR terminus.
Getting to the terminus was a fairly smooth ride, however it did not escape me that Nairobi CBD inbound traffic had started at Mlolongo. If one is travelling with the morning train be on time otherwise you may miss it as you sit in traffic.
At the terminus getting a ticket is fairly easy. No form of identification was required. They should be able to identify us in a worst case. A lost ticket simply has no owner... The security check is similar to what is at some small airports. However they need invest in a carousel, I found my backpack on the floor among many others. I found the waiting lounge full. The boarding call was made and everyone seemed to be rushing to board. Passengers who had heavy luggage had to struggle with it. Luggage were not tagged.
The train left at 0900 hrs. In the coach the seats are comfortable…. A face me experience…. A group of men next to me are all full of entitlement how the Government has worked so well… one can tell which side of the politics they belong to.
1115 hrs we are at Mtito Andei. The Train from Mombasa arrived as well. The countryside is green thanks to the recent rains. We saw herds of elephants, zebras, antelopes and a lion. A game drive it was.
A small cup of tea goes for Sh. 100.
1350 hrs we arrive at the Mombasa Terminus. We find the free transfer bus has left and we had to wait for 45 minutes for it to be back.
The train cafeteria had a Chinese hostess. Among the ushers in the two terminals were Chinese nationals. At the Mombasa Terminus I saw on a display board that by 2027 only 10% of the human capital will be foreign. 2017 has a 40% foreign human capital component. Chinese must be slow teachers or we are slow learners...
Taxis are asking for Sh. 1200 there was no Uber or Little Cab available in the station at that moment. The terminus is largely empty, finishing construction work still ongoing. I never saw a shop where I'd buy water. I pray there will be enough business to keep these stations active during off peak hours. I noted a cartel like behaviour where the cab guys could probably be restricted from the terminus since i tried hailing one and on phone he said I have to meet him at the main road, he did not want to come to the terminus.
The access road to the station is under construction, it goes through an ancient estate that is evidence of neglect. As one approaches the Mombasa CBD the roadside is all littered with heaps of uncollected garbage whose stench was really a discomfort in the hot weather. What do the counties do?
SGR is a new right of way but is running parallel to the century old railway. Same as Nairobi, Emali, Voi and Mombasa, rusty wagons and train engines dot the old railway stations. It begs the question what will we do with the assets of the old railway? Do we have the same hands that run down the old rail doing the errands for SGR?
The Economics … and Politics
Transport both cargo and passengers is key to growth. We were told that we need the train to decongest our main highway, move cargo fast and efficiently, move passengers cheaply and safely.
To do the railway we borrowed USD 1.6 Billion @ 2% for a 20 year tenor with a grace period of 7 years. Further we borrowed USD 1.633 Billion @ 360 points plus LIBOR (total roughly 4%) for a 15 year tenor 5 of which are a grace period. The second loan attracts insurance at 6.93% that was payable as one installment. During the grace period Interests will be payable and the principal spread for the rest of the tenor. (I stand corrected, Government data is hard to collect lately)
The total amounts payable principal, interests and costs at the end of the 20th year will be USD 4.97 Billion. Breaking that into smaller numbers we need to raise USD 0.25 Billion net annually for 20 years. Assuming that the rail is a business concern, that it should meet its costs fully, we should have business giving us Sh. 69 million to pay the financiers. Adding the other running costs and a return to the citizens we are talking of business worth more than Sh. 100 Million a day.
With fares at Sh. 700 for second class and a capacity of 2500 passengers daily that will only generate Sh. 50 million a month. I noted very small numbers going into the premier classes. Even with the growth of the passenger numbers, it's notable that passenger business is just an add on…. Many are in advanced ages and have never travelled to coast. We travel on purpose and holiday is a luxury in the present economy.
Our port has reported handling sightly below a million containers. Assuming we have a half of that on the rail annually at the announced price. Sh. 50,000 will generate Sh. 25 Billion. What are the running costs…. These fares were and remain politically motivated.
The settlements along the railway line is in towns. I do make observations that the towns can grow into small industrial towns. Mazeras doing construction materials, Emali doing Horticulture value addition. We need more of business for this railway even as we borrow more to extend it to Western Kenya.
My experience of Mombasa is that it's hard to come across fresh cabbage or potatoes. I feel for the farmer in Ndaragwa, Nyandarua whose milk and cabbages never fetch him or her a better price owing to transport infrastructure challenges. I feel for the peasant herder whose roof is a plastic polythene along the SGR who is next to a fence to keep him off the rail line, does he identify with this pricey asset?
Madaraka in my little understanding is the right to self determine. Will this project determine our future economically as touted? Or was it a legacy for the political leadership of the day.
My listening to fellow passengers talking about the incomes from one passenger train trip is so much… I think a Million and Billion mean the same to some.
The ride was smooth, I saved time. The business case for the SGR is deep, and not for the minnows in economic thoughts.
Kahugu Muiruri
June 6, 2017
Getting to the terminus was a fairly smooth ride, however it did not escape me that Nairobi CBD inbound traffic had started at Mlolongo. If one is travelling with the morning train be on time otherwise you may miss it as you sit in traffic.
At the terminus getting a ticket is fairly easy. No form of identification was required. They should be able to identify us in a worst case. A lost ticket simply has no owner... The security check is similar to what is at some small airports. However they need invest in a carousel, I found my backpack on the floor among many others. I found the waiting lounge full. The boarding call was made and everyone seemed to be rushing to board. Passengers who had heavy luggage had to struggle with it. Luggage were not tagged.
The train left at 0900 hrs. In the coach the seats are comfortable…. A face me experience…. A group of men next to me are all full of entitlement how the Government has worked so well… one can tell which side of the politics they belong to.
1115 hrs we are at Mtito Andei. The Train from Mombasa arrived as well. The countryside is green thanks to the recent rains. We saw herds of elephants, zebras, antelopes and a lion. A game drive it was.
A small cup of tea goes for Sh. 100.
1350 hrs we arrive at the Mombasa Terminus. We find the free transfer bus has left and we had to wait for 45 minutes for it to be back.
The train cafeteria had a Chinese hostess. Among the ushers in the two terminals were Chinese nationals. At the Mombasa Terminus I saw on a display board that by 2027 only 10% of the human capital will be foreign. 2017 has a 40% foreign human capital component. Chinese must be slow teachers or we are slow learners...
Taxis are asking for Sh. 1200 there was no Uber or Little Cab available in the station at that moment. The terminus is largely empty, finishing construction work still ongoing. I never saw a shop where I'd buy water. I pray there will be enough business to keep these stations active during off peak hours. I noted a cartel like behaviour where the cab guys could probably be restricted from the terminus since i tried hailing one and on phone he said I have to meet him at the main road, he did not want to come to the terminus.
The access road to the station is under construction, it goes through an ancient estate that is evidence of neglect. As one approaches the Mombasa CBD the roadside is all littered with heaps of uncollected garbage whose stench was really a discomfort in the hot weather. What do the counties do?
SGR is a new right of way but is running parallel to the century old railway. Same as Nairobi, Emali, Voi and Mombasa, rusty wagons and train engines dot the old railway stations. It begs the question what will we do with the assets of the old railway? Do we have the same hands that run down the old rail doing the errands for SGR?
The Economics … and Politics
Transport both cargo and passengers is key to growth. We were told that we need the train to decongest our main highway, move cargo fast and efficiently, move passengers cheaply and safely.
To do the railway we borrowed USD 1.6 Billion @ 2% for a 20 year tenor with a grace period of 7 years. Further we borrowed USD 1.633 Billion @ 360 points plus LIBOR (total roughly 4%) for a 15 year tenor 5 of which are a grace period. The second loan attracts insurance at 6.93% that was payable as one installment. During the grace period Interests will be payable and the principal spread for the rest of the tenor. (I stand corrected, Government data is hard to collect lately)
The total amounts payable principal, interests and costs at the end of the 20th year will be USD 4.97 Billion. Breaking that into smaller numbers we need to raise USD 0.25 Billion net annually for 20 years. Assuming that the rail is a business concern, that it should meet its costs fully, we should have business giving us Sh. 69 million to pay the financiers. Adding the other running costs and a return to the citizens we are talking of business worth more than Sh. 100 Million a day.
With fares at Sh. 700 for second class and a capacity of 2500 passengers daily that will only generate Sh. 50 million a month. I noted very small numbers going into the premier classes. Even with the growth of the passenger numbers, it's notable that passenger business is just an add on…. Many are in advanced ages and have never travelled to coast. We travel on purpose and holiday is a luxury in the present economy.
Our port has reported handling sightly below a million containers. Assuming we have a half of that on the rail annually at the announced price. Sh. 50,000 will generate Sh. 25 Billion. What are the running costs…. These fares were and remain politically motivated.
The settlements along the railway line is in towns. I do make observations that the towns can grow into small industrial towns. Mazeras doing construction materials, Emali doing Horticulture value addition. We need more of business for this railway even as we borrow more to extend it to Western Kenya.
My experience of Mombasa is that it's hard to come across fresh cabbage or potatoes. I feel for the farmer in Ndaragwa, Nyandarua whose milk and cabbages never fetch him or her a better price owing to transport infrastructure challenges. I feel for the peasant herder whose roof is a plastic polythene along the SGR who is next to a fence to keep him off the rail line, does he identify with this pricey asset?
Madaraka in my little understanding is the right to self determine. Will this project determine our future economically as touted? Or was it a legacy for the political leadership of the day.
My listening to fellow passengers talking about the incomes from one passenger train trip is so much… I think a Million and Billion mean the same to some.
The ride was smooth, I saved time. The business case for the SGR is deep, and not for the minnows in economic thoughts.
Kahugu Muiruri
June 6, 2017
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