Nairobi, Kenya – (African Boulevard News) – Kenya has recently made the decision to raise passenger fares on a Chinese-built train, following an announcement by the country’s central bank governor, Kamau Thugge. Thugge revealed that the Kenyan shilling had been overvalued by 25% for a number of years, resulting in the country maintaining an artificially low fare for train services.
The Chinese-built train, known as the Standard Gauge Railway (SGR), has been a significant development for Kenya’s transportation infrastructure. It has provided a faster and more efficient mode of transportation for both passengers and cargo between Nairobi, the capital city, and Mombasa, a major coastal city. However, the low fares have been a concern for the government due to the financial strain it has placed on the railway operator, Kenya Railways Corporation.
In response to the overvaluation of the Kenyan shilling, the government has decided to increase the passenger fares on the SGR. The move is expected to help the railway operator cover its costs and ensure the sustainability of the service. The decision is also in line with the government’s efforts to reduce the budget deficit and address the country’s fiscal challenges.
While the price hike may come as a disappointment to some commuters, industry experts argue that it is a necessary step to ensure the long-term viability of the SGR. According to Joseph Kieyah, an economist and former advisor to the Kenyan government, “The government cannot continue to subsidize the fares indefinitely. Adjusting the fares to reflect the true cost of the service is a reasonable decision.”
The increased fares are also expected to encourage more private sector investment in the railway sector. As the government works towards achieving its Vision 2030 development agenda, it recognizes the importance of modernizing the country’s infrastructure and attracting private investors. By taking steps to ensure the financial sustainability of the SGR, the government is sending a signal to potential investors that Kenya is committed to creating a favorable business environment.
Despite the fare increase, the SGR remains an attractive option for travelers due to its convenience and reliability. The train service has significantly reduced travel time between Nairobi and Mombasa, offering a comfortable and efficient mode of transportation. With the increased fares, the government aims to strike a balance between providing affordable transportation options and ensuring the financial viability of the SGR.
In conclusion, Kenya’s decision to raise passenger fares on the Chinese-built train is a necessary step to address the overvaluation of the Kenyan shilling and ensure the sustainability of the service. While it may disappoint some commuters, industry experts believe it is a reasonable decision that will encourage private sector investment and contribute to the country’s development agenda. The SGR continues to be an attractive transportation option, providing fast and reliable travel between Nairobi and Mombasa.
