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How the state is forcing importers to use SGR

Parliament has recommended a higher levy for importers who choose to transport their goods by road in a move aimed at forcing the use of standard gauge railway (SGR).

In the new recommendation by the National Assembly, the Railway Development Levy will increase by 0.3 % points or 2.8 % of the cost of goods transported by road.

Right now transporters are paying 2.5 % of the cost of imported goods in RDL when ferrying goods from the port of Mombasa to Nairobi and to other remote areas.

But importers who opt for SGR will pay a lower fee of 1.5 % if recommendations are adopted by the parliament.

“The committee recommends that…importers who choose to haul their goods using the SGR can pay a preferential Railway Development Levy of 1.5 % of the value of goods.

While importers who choose to use the road transport will attract an additional surcharge of 0.3 percent of the value of goods imported (up to a maximum of $138 (Sh14,900),” reads part of a report on the inquiry into the use of SGR.

The report established that the cost of transport went when they used the rail due extra expenses they incur when clearing goods at the Nairobi depot. Cost even shoot further when one has to hire a truck to collect the goods from the  depot.

A section of the committee feels proposed high rates should be reviewed by the relevant stakeholders including the Transport Ministry, importers, Container Freight Stations, transporters and the Kenya National Chamber of Commerce.

The recommendations were informed inquiry into concerns raised by Mvita MP Abdulswamad Nassir over a government directive forcing importers to transport their cargo Nairobi and hinterland via SGR.

The committee also probed the directive issued in May requiring all transit cargo be transported to Naivasha where it recommended that ‘ that freedom’ should remain with the importers.

“Importers should have the freedom of choice on the mode of transport to haul their goods from the port to the final destination without restrictions from any government agency,” it read.

 


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