Last month the country shared a moment of pride and accomplishment when the President finally launched the Standard Guage Railway (SGR). Indeed, it was a joyous occasion that marked a triumph of a century; it was the first time, after 122 years, that the country had built its own railway track. All this while, we had depended on the old railway line built by the British during the colonial times. The upgrade was necessitated by the need to have a modern railway system that could move faster, efficiently, and have more capacity to meet the countryâ€™s growing needs in trade and investment.
"This is a historic day...a day when everyone of us should feel proud to be Kenyan," President Uhuru Kenyatta said, adding it was a milestone in a transformation to an industrialized, prosperous and middle-income country.
The construction of this modern railway line commenced four years ago in Miritini, Mombasa and ended at Syokimau, Machakos County. Madaraka Express, the passenger trains that will be plying between Mombasa and Nairobi will take half the travel time between four and five hours moving at a speed of 120Km/hr with a capacity to carry 1260 passengers. Currently, passengers using buses take about ten hours to move between the two cities. Traveling on SGR economy class will cost Sh700 and first class to Sh3,000. The buses plying the route charge an average of Ksh.1200. The Madaraka Express will be a great relief for those who would want to reach faster but couldnâ€™t afford air travel. The SGR train incentive does not stop with passengers. Traders will have the cost of transporting cargo reduce significantly. They will be delivered faster compared to road or â€˜lunaticâ€™ (old locomotives) cargo trains.
So what does this achievement translate to in the overall economy?
The project cost a whooping Ksh.327 Billion and as with any good investment project worth its salt there is a certain expectation of returns. On top of the list are trade and investment. It is envisioned that the SGR will transform trade and investment when it comes to the movement of cargo during exportation and importation. The SGR cargo trains can ferry 61,000 tonnes a day, replacing 2,000 truck (each with an average payload of 30 tonnes). This will boost efficiencies at the port as cargo will be transported into and out of the port much faster. Traders dealing in different commodities like maize, horticultural crops etc looking to have their produce exported will do it with much efficiency and at cost effective rates. This will spur investment in trade and consequently create wealth for the people. What does it mean for the holiday homes market like Sultan Palace Beach Retreat?
When it comes to holiday homes market segment, we anticipate that the SGR Madaraka Express will go along way in boosting tourism in the coastal region. The region remains the one of the most preferred tourism destination in Kenya. This comes on the background of greatly improved security that had previously threatened the industry. The cheaper fares offered by Madaraka Express will be an incentive for those who would like to go for a holiday on a budget, more so those with relatively large families. Public transport can be cumbersome while hiring a safari truck is quite over the bar hence train travel becomes a better cost effective option.
In addition to this, the train offers a unique travel experience where passengers will get to see beautiful scenery and wildlife. Tour companies will probably introduce train travel in the Mombasa-Nairobi route as a value-add package given the fantastic experience. Those landing at Jomo Kenyatta International Airport (JKIA) may opt to go via train rather than go via air. However, to position this as a value addition, the management of the Madaraka Express service will need to invest in good marketing efforts. In the medium to long term, we anticipate increased activity in the hospitality segment that is; holiday homes and hotels.
In full analysis, the SGR will transform the economy directly when it comes trade, investment, tourism, and hospitality. The indirect benefits also abound as opportunities will be created along the various value chains leading up to the sectors.
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