A mega petroleum order has provided a peek into the cost of running passenger and cargo trains on the Chinese-built standard gauge railway (SGR) even as oil marketers scrambled for the multi-billion-shillings supply contract.
A disclosure by the Kenya Railways Corporation (KRC) revealed that it requires over 38 million litres of automotive diesel to keep locomotives running on the SGR for a year.
This means it costs about KSh6.22 billion ($47.33 million) to power the trains annually going by the 38.4 million litres of diesel requested from oil marketers by KRC. The prevailing diesel price in Nairobi has been set at KSh162 ($1.23).
The latest operating costs of the SGR are not readily available although past documents tabled in the Kenyan Parliament showed it cost about KSh18 billion ($136.98 million) to operate the passenger and cargo trains, which means that fuel alone takes up at least 34 per cent of the overall operating costs of railway, which have in the past dwarfed revenues, fanning public outrage over the viability of the flagship project.
This comes as top oil marketers jostled for a slice of the multi-billion-shilling diesel supply deal which could boost their revenues in a market suppressed by the negative effects of the high cost of living.
“The estimated quantity is defined as 38,400 cubic meters (38,400,000 litres) for the one-year period of contract,” KRC said in a tender call.
“The stocks shall be monitored by the supplier as per consignment stocking defined. The supplier will be responsible for all logistics necessary pertaining to the delivery and dispensing of fuel at the depot. The delivery point will be Nairobi Depot and Port Reitz depot of Mombasa,” it added.
SGR’s generated revenues
The SGR project, which cost $3.2 billion (KSh419.84 billion) that was largely borrowed from the Exim Bank of China in May 2014, operates passenger services from Nairobi to Mombasa and an inter-county service with stations at Athi River, Emali, Kibwezi, Mtito Andei, Voi, Miasenyi as well as Mariakani stations.
Passengers pay KSh1,000 ($7.61) for economy class seats and KSh3, 000 ($22.83) on fast class seats between Nairobi and Mombasa aboard the express train.
Revenue generated from the SGR grew 13.15 per cent in the nine months to September last year compared to a similar period in 2021, lifted by improved passenger and cargo movement.
Data by the Kenya National Bureau of Statistics (KNBS) shows that revenue from SGR operations rose to KSh11.78 billion ($89.65 million) between January and September this year, up from KSh10.419 billion ($79.29 million) in a similar period in 2021.
Revenue from passenger services between Mombasa and Nairobi hit KSh1.91 billion ($14.54 Million), representing a 28.19 per cent growth compared to the KSh1.49 billion ($11.34 million) realized between January and September 2021.