SUCCESS IN NUMBERS DID NOT TRANSLATE INTO PROFITABILITY
(Posted 10th June 2018)
Figures seen suggest that Kenya’s SGR railway passenger operation, locally known as Madaraka Express, has carried 1.338 million passengers during the first 12 months of operations between Nairobi and Mombasa and vice versa.This number generated some 1 billion Kenya Shillings in turnover, a number which according to some critics could have been higher has Kenya Railways not time and again messed up.
‘The belated opening of payments online with MPesa is one such factor. Reservations for a long time could only be made in person or through intermediary at the rail terminus directly and up to now is it not possible to book train tickets to Mombasa at the Nairobi railway station.
Initially was access very difficult and SGR failed to link the Nairobi railway station to the new terminus, forcing passengers to use costly means to get there such as taxis at both ends of the line.
The company also still does not allow payment with commonly used credit cards and is not on any of the major global booking systems, a sign that those responsible have not learned lessons or listened to advice from the tourism industry how to go about selling the service. To make it worse, the route through the Nairobi national park is a PR nightmare which will haunt them for a long time to come. For me a change of leadership and fresh orientation towards giving the market a better service are long overdue‘ ranted a regular Nairobi based source when passing the information overnight.
Also a sore point remains the security gauntlet passengers have to make their way through with multiple – and often said redundant – check points which remain exposed to the weather.
Besides regular complaints about logistics and lack of understanding how to market the service was however also praise received for offering Kenyans at last a safe mode of transport between the capital and the coast and at affordable fees even though the one way launch fare of 700 Kenya Shillings has since been upped in Economy Class to 1.000 Kenya Shillings while the First Class fare of 3.000 Kenya Shillings one way has been maintained. This fare is notably now only 1.500 cheaper than some local airlines charge for flights from Wilson Airport to Mombasa while bus fares – passenger numbers have substantially declined since the launch of the Madaraka Express a year ago – have reflected the loss of business on this route.
Despite the billion Shillings income does the route not generate profits it was learned and the slow take up of cargo services may be one reason for that as the second income platform appears to be equally poorly marketed and had been fraught with logistical nightmares – key among those the lack of a direct rail link from the port of Mombasa to the terminus where the trains as assembled.
Supporters to the project will no doubt point to the success in numbers of passengers carried – now two daily departures are offered in both directions – but critics of the project will point out to the heavy borrowing which was needed to get to this point and that paying back loans will become a great challenge for the railway operator and the government unless revenues grow massively in coming months and years.