China-built train fare hike sparks controversy, paves way for financial sustainability and development

by MMC
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Nairobi, Kenya – (African Boulevard News) – Kenya recently took the decision to increase fares for passengers 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 several years, resulting in the country maintaining artificially low rail fares.

The Chinese-built train, known as the Standard Gauge Railway (SGR), was a significant development for Kenya’s transport infrastructure. It provided a faster and more efficient mode of transport for passengers and goods between Nairobi, the capital, and Mombasa, a major coastal city. However, the low fares worry the government because of the financial pressure it places on the train operator, Kenya Railways Corporation.

In response to the overvaluation of the Kenyan shilling, the government decided to increase passenger fares on the SGR. The move is expected to help the train operator cover its costs and ensure the sustainability of the service. The move is also part of the government’s efforts to reduce the budget deficit and address the country’s fiscal challenges.

While the price hike may disappoint some commuters, industry experts say it is a necessary step to ensure the long-term viability of the SGR. According to Joseph Kieyah, an economist and former adviser to the Kenyan government, “the government cannot continue to subsidize tariffs indefinitely. Adjusting rates to reflect the true cost of service is a reasonable decision.

The increase in fares is also expected to encourage more private sector investment in the rail sector. As the government strives to achieve 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 viability of the SGR, the government is sending a signal to potential investors that Kenya is committed to creating a favorable business environment.

Despite the increase in fares, the SGR remains an attractive option for travelers due to its convenience and reliability. The rail service has significantly reduced travel time between Nairobi and Mombasa, providing a comfortable and efficient mode of transportation. With the fare increase, the government aims to strike a balance between providing affordable transport options and ensuring the financial viability of the SGR.

In conclusion, Kenya’s decision to increase passenger fares on the China-built train is a necessary step to address the overvaluation of the Kenyan shilling and ensure the sustainability of the service. While this may disappoint some commuters, industry experts believe it is a reasonable move that will encourage private sector investment and contribute to the country’s development agenda. The SGR continues to be an attractive transport option, providing fast and reliable travel between Nairobi and Mombasa.

About the author of the message

Kenyan editor

The African Boulevard African editorial team brings you Kenyan news and the latest headlines in politics, economics, business, investment and entertainment. We are impartial, motivated solely by the quest for truth.

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