Survey casts doubt on gains of huge infrastructure projects

Billions of shillings being spent on expansion and automation of key logistics facilities around the country may not expressly improve transport efficiency, an industry survey shows.

The 2015 East Africa Logistics Performance Survey released last week by the Shippers Council of Eastern Africa (SCEA) identifies infrastructure improvement as just one of several areas that need to be addressed.

Industry players interviewed for the survey maintain that the desired level of efficiency can only be achieved if State agencies running the key logistical facilities worked in a coordinated manner.

To improve rail transport efficiency, 50 per cent of the respondents said all players must be incorporated in aocating the mode of transport.

“There is no doubt that standard gauge railway (SGR) will bring efficiency but shippers have not been involved since the beginning of the construction. Their participation in the project is important since it will encourage them to shift to using railway,” said Gilbert Langat, chairman of Kenya Shippers Council.

Twenty five per cent of the respondents supported ongoing efforts to address train capacity while another 25 per cent supported enhancing rail connectivity with other modes of transport.

Though useful for the transportation of bulky products over long distances, railway accounts for just about 4-6 per cent of one million containers evacuated from the port of Mombasa while in Dar-es-Salaam it is estimated to be only five per cent.

“The government needs to liaise with the shippers to get their input into the ongoing railway projects, particularly in ensuring compatibility with other modes of transport. This will ensure seamless transportation especially when getting the cargo from the railway station to the warehouses,” Mr Langat said.

The region’s shippers have been limited to the amount of freight they can move via the metre gauge measuring 1000mm to 1067mm or 3 feet 6 inches. More aanced economies employ the standard gauge of 1435mm or 4 feet 8 12 inches.

The size of wagons determines the maximum gross weight that can be loaded.

Data prepared by SCEA shows that the Northern Corridor railway route currently operated by Rift Valley Railways charges $500 per twenty foot container and $1,000 for a forty foot container from the port of Mombasa to the Nairobi Inland Container Depot (ICDE) yard in Embakasi.  

For the Kampala route the rates are $1,250 and $2,200 respectively. 

The return route has lower rates since most of the containers are empty. For Kampala the rate is $600 per twenty foot container and $700 for a forty foot container. Similar rates from Nairobi to Mombasa are $200 and $400.

To cut the cost of cross-border transport, Kenya and Uganda have lined up a mega standard gauge rail, with an official completion timeline of 2018. Kenya commenced work on the Mombasa-Nairobi section early this year, helped by a S27 billion concessionary loan from China.

“There is need to start sensitisation at an early stage to ensure a smooth transition. To begin with, shippers need to start embracing the railway infrastructure that is already in place,” he said.

The survey also casts doubt as to whether ongoing expansion of airports will improve cargo dwell time. Majority of respondents – 40 per cent – say import and export clearance processes and procedures need to be improved.

By comparison, nine per cent are either counting on infrastructure upgrade or ICT investments to boost cargo dwell time while 24 per cent feel improving airline and transit shed operations could do the trick.

“There are a lot of documents required in importation and exportation. For instance, one needs 300 documents to export flowers to Europe and it ends up wasting a lot of days for shippers. We need a single document that will even bring down the cost of exportation and importation,” Mr Langat said.

Kenya has put billions of shillings in expanding key airports across the country. In May, it opened the Sh1.7 billion pre-fabricated second terminal at the Jomo Kenyatta International Airport, raising the facility’s capacity to 7.5 million travellers annually.

The airport’s Terminal 1 was expanded last year and the Kenya Airports Authority is working to build Terminal 3 at nearly Sh60 billion, which will also include a second runway and will handle 20 million passengers. Similarly, the Mombasa-based Moi International Airport is also being expanded.

For roads, which have gobbled up Sh100 billion annually in the last five years, only 43 per cent of the survey respondents see such investments as a helpful step towards efficiency.

They are instead aocating for deliberate measures to reduce transit times (36 per cent) and improved role of the private sector (14 per cent).

According to the survey, 54 per cent of the respondents favour changes in clearance processes as a way of achieving faster truck turnaround times at major maritime ports in East Africa as opposed to 23 per cent who support infrastructural development.


“There are 20 agencies involved in trade facilitation and the government needs to come together to deal with this problem,” said Agayo Ogambi, head of aocacy and membership development at SCEA.

“There is a lot of duplication of these agencies and merging to make it easy for the players to do business is the only solution that will work. Let there be a lead agent who will intervene when there is a hitch with for instance, the systems at KRA,” he said.

This perception also holds for the region’s ports in Mombasa and Dar es Salaam. A significant number of users – 31 per cent of the survey respondents – feel that government procedures are the biggest contributors to prolonged dwell times at the ports. 

By comparison, 25 per cent of respondents attribute dwell time problem to network and ICT problems while 13 per cent blame it on the presence of too many government agencies and insufficient or faulty port infrastructure.