Kenya Railways Takes Major Step, Now Controls 90% of SGR Operations
Kenya Railways Corporation (KRC) has assumed control of 90% of the operations for the Standard Gauge Railway (SGR) line from the Chinese firm Africa Star Railway Operation Company (Afristar). This move is part of a strategy to reduce the high operational costs associated with the railway services. The complete takeover is scheduled for June next year.
Initially, KRC planned to finish the transition by May 2022. However, the timeline has shifted. According to KRC Managing Director Philip Mainga, the final transfer of responsibilities is now expected by December 31, 2025. Nevertheless, KRC is negotiating with Afristar to expedite this process and complete the handover by June 2025.
As of now, KRC has already taken over 90% of the SGR functions. The remaining function, which involves the ‘signalling’ operations, is set to be transferred by December this year. This will reduce KRC’s reliance on Afristar to approximately 6%.
The transition to Kenyan management has been progressing well, with local personnel now handling 87% of the operations. This figure is expected to increase further once KRC takes over the signalling function, decreasing reliance on Afristar to around 6%.
Mainga noted that the remaining tasks involve train safety, which demands extensive training and expertise. This explains why KRC aims to complete the takeover by June 2025, a year ahead of the original plan.
Currently, KRC has integrated 962 staff members from Afristar into its operations, with an additional 150 staff expected by the end of this year. This is in addition to the 1,280 employees KRC inherited from the defunct Rift Valley Railways (RVR) following the failed 25-year concession in 2017.
Mainga mentioned that when KRC assumed control of the meter gauge operations from RVR, it took on 1,280 employees. The corporation aims to maintain its payroll within 30% of its revenue, a target that aligns with its cost management objectives.
Following years of financial losses, the government decided to concession freight and passenger rail services. The KRC Act was subsequently amended to facilitate the provision of rail services through concession agreements.
Armed with a Laptop and a cup of coffee, Rothschild is on a mission to conquer the news world, one headline at a time.