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Kenya announced a significant rise in passenger tickets on the Chinese-built Standard Gauge Railway on Wednesday, as the country battles to repay loans owed to Beijing and others, as well as increasing fuel prices.
The 470-kilometer (290-mile) travel between the port city of Mombasa and the capital, Nairobi, will cost roughly $30 in first class, up from $19, and $10 in economy, up from $6, according to state-owned Kenya Railways.
Kenya Railways cited the global rise in fuel prices: “This increase is informed by changes in the energy and petroleum sector, where prices of fuel have significantly increased, thus affecting the cost of our operations.”
The news came just days after Kenya’s central bank governor, Kamau Thugge, stated that the Kenyan shilling had been overvalued by 25% for years, causing the government to maintain an artificially strong exchange rate.
President William Ruto was in China two weeks ago, seeking a $1 billion loan to complete stalled infrastructure projects, despite Kenya’s overall indebtedness reaching a record $70 billion.
The increased train rates take effect on January 1, 2024.The modifications will also have an impact on Nairobi’s famed commuter rail service, as well as the Kisumu and Nanyuki safari trains, which attract thousands of tourists each year.
The Standard Gauge Railway, or SGR, which cost $4.7 billion borrowed from Chinese banks, started operations in 2017 but has struggled with low uptake of its cargo services.
“The Kenya SGR desperately needs cross-border expansion to make it a financially sustainable project,” economist Aly-Khan Satchu told the Associated Press.
“The SGR, as is, is a dud. To make it sustainable, it needs to connect Uganda’s oil to the sea, and (Congo) minerals,” Satchu added.
Kenya has been grappling with rising public debt, prompting Ruto to impose harsh austerity measures such as bans on overseas travel and a 10% reduction in all government ministry budgets.
However, Kenyans have criticized Ruto for his own international excursions, with 38 trips since his inauguration in September 2022. That is more than any of his four predecessors did in their first year.
