In a bid to enforce the use of standard gauge railway (SGR), the Kenyan government has imposed a higher rail import levy for importers who choose to transport goods by road, recommending a 0.03 percentage increase (2.8 percent) from the 2.5 percent paid on the Railway Development Levy of the cost of goods ferried by road.
A report released by the SGR committee, states that “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).” But if recommendations of the National Assembly transport committee are adopted, transporters who make use of SGR will pay a lower fee of 1.5 percent of the value of goods.
This recommendation was made by the committee, following concerns raised by Mvita MP Abdulswamad Nassir over the governments directive that required haulage of cargo destined for Nairobi and hinterland through SGR.
However, some importers have voiced out that their transport costs shoot up when they use the rail due to extra fees, more time spent clearing goods at the congested Nairobi depot and the need to send a truck to pick up the goods from there. Importers are requesting 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.
In response, the committee says the proposed rate of surcharge can be subject to review by the relevant stakeholders including the Cabinet Secretary for Transport, importers, Container Freight Stations, transporters and the Kenya National Chamber of Commerce, among others.
There are mixed reactions on whether this directive will be implemented as the state had proposed the directive earlier in May, on the use of SGR for all cargo destined to Nairobi. The committee was however forced to back down from its May directive following pressure from regional economies.