@BusinessDaily

EDITORIAL: Forcing State agencies to use SGR not the solution

3 months ago, 13 Mar 16:06

By: Editorial

Ongoing efforts to have more cargo on the standard gauge railway (SGR) – though necessary – does betray serious flaws in the planning of the whole project.  This is because recent chain of government actions do paint a picture of an operation that is straining to meet its objectives despite the massive investments that have been onjected into it. Tell-tale signs of this struggle first became public last month when the government ordered that all imports through the Mombasa port be carried on the SGR to Nairobi’s inland container depot (ICD). The latest is Head of Public Service Joseph Kinyua’s directive that government departments and agencies must transport all import and export cargo, including cargo for projects undertaken by third parties, on the SGR. This is wrong and will certainly bring distortions in the market with the consumer as the biggest loser. In a liberal economy, consumers are always best left to pick what best works for them. Transport forms a critical cost element in infrastructure projects or product value-chains and open bidding helps to attain the most competitive rates. Locking all cargo on the SGR kills competition. SGR was principally built to offer cargo shippers an option to the existing means of transport and should not now be made a killer of competitors. What the government needs to focus on at this point in time is to give the SGR a competitive edge instead of frustrating rival service providers. This is because ultimately in transport and logistics, efficiency and convenience is king – meaning SGR must be made to suit the interests of users both in terms of pricing and flexibility. A key put-off for many businesses is that the SGR currently lacks a sufficient last mile delivery network and ultimately  inconveniences cargo owners. Traders have to incur extra cost of trucking cargo from the ICD to their respective premises – losing any price advantages gain on SGR. Proper planning should have addressed such downsides of bad pricing and a rigid transport system so that the government does not have to hold a gun to people’s head to use the SGR.
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@BusinessDaily

EDITORIAL: Forcing State agencies to use SGR not the solution

3 months ago, 13 Mar 16:06

By: Editorial
Ongoing efforts to have more cargo on the standard gauge railway (SGR) – though necessary – does betray serious flaws in the planning of the whole project.  This is because recent chain of government actions do paint a picture of an operation that is straining to meet its objectives despite the massive investments that have been onjected into it. Tell-tale signs of this struggle first became public last month when the government ordered that all imports through the Mombasa port be carried on the SGR to Nairobi’s inland container depot (ICD). The latest is Head of Public Service Joseph Kinyua’s directive that government departments and agencies must transport all import and export cargo, including cargo for projects undertaken by third parties, on the SGR. This is wrong and will certainly bring distortions in the market with the consumer as the biggest loser. In a liberal economy, consumers are always best left to pick what best works for them. Transport forms a critical cost element in infrastructure projects or product value-chains and open bidding helps to attain the most competitive rates. Locking all cargo on the SGR kills competition. SGR was principally built to offer cargo shippers an option to the existing means of transport and should not now be made a killer of competitors. What the government needs to focus on at this point in time is to give the SGR a competitive edge instead of frustrating rival service providers. This is because ultimately in transport and logistics, efficiency and convenience is king – meaning SGR must be made to suit the interests of users both in terms of pricing and flexibility. A key put-off for many businesses is that the SGR currently lacks a sufficient last mile delivery network and ultimately  inconveniences cargo owners. Traders have to incur extra cost of trucking cargo from the ICD to their respective premises – losing any price advantages gain on SGR. Proper planning should have addressed such downsides of bad pricing and a rigid transport system so that the government does not have to hold a gun to people’s head to use the SGR.
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