Home ECONOMY SGR empty seats order signals ticket price rise

SGR empty seats order signals ticket price rise

by biasharadigest
Economy

SGR empty seats order signals ticket price rise

Standard gauge railway
Standard gauge railway (SGR) train. FILE PHOTO | NMG 

The standard gauge railway (SGR) passenger train services will resume Monday at a reduced capacity, raising the possibility of a rise in fares to compensate the Chinese operator.

Transport Cabinet Secretary James Macharia said Wednesday that the passenger service will keep half of the seats empty under the social distancing rules imposed to curb the spread of the coronavirus in the country.

This will put pressure on Kenya Railways to increase fares in a bid to raise revenues needed to pay the operator — China Communications Construction Company — or increase State subsidies.

The revenues from the SGR service have not been enough to meet the operation costs, which are estimated at Sh1.5 billion a month or Sh18 billion a year.

“Increase in passenger fare on Madaraka Express train are operational matters that will be determined by the operator. We will, however, give special preference to passengers who had booked tickets before suspension of services when we resume operations,” said Mr Macharia.

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Currently, the SGR service charges Sh1,000 for economy class tickets and Sh3,000 for first class tickets between Nairobi and the coastal city of Mombasa.

Operations of the Madaraka Express passenger and cargo trains risk being grounded over Sh38 billion in unpaid bills, underlining the push for the service to generate more internal revenues.

The government has exempted airlines like Kenya Airways from keeping some seats empty on domestic routes to avoid the risks of the carriers increasing ticket prices to remain sustainable and profitable.

Bus firms will, however, operate under strict health directives, including leaving some seats empty under the social distancing rules, ensuring both passengers and crew members wear face masks and screening of travellers.

The bus operators will require a special permits to enter Nairobi and Mombasa.

President Uhuru Kenyatta Monday lifted restrictions on travel in and out of the Nairobi, Mombasa and Mandera and allowed air travel to resume.

Domestic commercial and passenger flights are scheduled to restart on July 15, while international travel will resume from August 1, offering a boost to Kenya Airways, which had lost an estimated Sh10.6 billion in revenues at the end of June.

SGR passenger service, which were grounded in April 6, will start operations with one train leaving Nairobi for Mombasa at 8.00am and return to the capital from 1.25 pm for arrival at 6.40 pm

Kenya Railways will also provide a Nairobi Commuter Rail Service train that will link the Nairobi SGR Terminus to the Nairobi Central business district.

“Kenya Railways shall deploy 10 coaches for passengers with a total one-way capacity of 600 passengers (or 50 percent of capacity), and one additional coach that shall be used to isolate passengers suspected to be infected with Covid-19,” said Mr Macharia.

Resumption of flights, the SGR passenger train service and long-distance bus travel is set to boost Kenya’s tourism sector, which has lost Sh80 billion so far in tourism revenue, about half of last year’s total, due to the coronavirus crisis.

The estimated losses include cancelled bookings for the high season months of July-October, said Mohammed Hersi, the chairman of the Kenya Tourism Federation, a private sector lobby.

From Indian Ocean beaches to the Maasai Mara wildlife reserve, tourism contributes 10 percent of Kenya’s annual economic output and employs over 2 million people, most of who have been laid off.

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