Kenya Railways (KR) has outlined a ambitious plan to turn its current operating loss of Sh2.4 billion into an operating profit of Sh9.09 billion within the next five years.
The strategy, spanning from 2023 to 2027, centers on boosting revenue through the automation of key collection points and expanding digital payment options. This forward-looking approach aims to streamline operations and enhance efficiency, positioning Kenya Railways for sustainable growth and profitability in the years ahead.
“The corporation will finalize the integration of the Freight Management System with Kenya Revenue Authority (KRA) and Kenya Ports Authority (KPA) systems to increase transactional efficiency. The credit control policy and capital structure will also be reviewed to achieve a debt-to-revenue ratio of five percent on receivables,” states the plan launched by Transport Cabinet Secretary Kipchumba Murkomen in Mombasa.
If successfully implemented, the plan aims to enhance operational efficiency and reliability of Kenya Railways. “Kenya Railways aims to significantly expand its network, modernize its infrastructure, and adopt innovative technologies by 2027. This will enhance services such as the Madaraka Express, Nairobi Commuter Rail, and meter gauge railway for both passenger and freight services in Kenya,” Murkomen said.
Network expansion
The plan also outlines efforts to extend the railway network, particularly the standard gauge railway, from Nairobi to Malaba on the border with Uganda, enhancing regional trade. “This aligns with our commitment to fulfill the dreams of our forefathers to link the Indian Ocean Coast with the Atlantic Coast,” he added.
The plan aims to increase returns from landed assets from Sh1.47 billion in 2022 to Sh2.5 billion in 2027.
KR Managing Director Philip Mainga said the corporation seeks to achieve this by commercializing its properties through an investment plan for the assets. “Landed assets along the railway corridor play a crucial role in supporting and sustaining rail operations. Completion of surveys, registration, and titling of all KR land will be prioritized, and redevelopment of existing estates will be undertaken. All property will be re-valued and rents reviewed to market rates during the plan period to ensure value for money,” the strategic plan states.
partnership
In addition to its revenue-boosting strategies, Kenya Railways (KR) plans to embark on the development of new commercial properties through public-private partnerships and joint ventures over the next five years.
Leveraging the strategic locations of its landed assets, KR aims to capitalize on advertisement opportunities and fiber connectivity along the rail corridor.
Furthermore, the plan emphasizes the development, rehabilitation, and upgrading of rail networks and associated infrastructure. KR targets an increase in Net Tonne Kilometers from Sh3.38 billion in 2022 to Sh5.20 billion and aims to elevate the number of passengers from 5.71 million to 8.8 million by 2027.
To bolster its market share, KR aims to raise the rail market share of port throughput from 26 percent in 2022 to 42 percent. This includes achieving a customer acquisition ratio of 1:4 and an 80 percent customer retention rate and satisfaction index.
Moreover, KR seeks to adjust its local to transit cargo mix from the current 68:32 to 56:44 by establishing cargo handling facilities at border points and collaborating with the private sector for investment in specialized wagons and equipment.
Additionally, the operationalization of MV Uhuru II is also included in the plan. These strategic initiatives underscore KR’s commitment to enhancing its operations, expanding its market presence, and driving growth in the rail sector.
