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Kenya Railways (KR) is planning to transform its current operating loss of Sh2.4 billion into an operating profit of Sh9.09 billion within the next five years.

The plan, which spans from 2023 to 2027, focuses on increasing revenue through the automation of key collection points and diversification of digital payment options.

“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.

Joint ventures

The corporation also plans to develop new commercial properties through public-private partnerships and joint ventures over the next five years. KR will capitalize on the strategic locations of its landed assets for advertisement opportunities and fiber connectivity along the rail corridor.

Other key highlights of the plan include developing, rehabilitating, and upgrading rail networks and associated infrastructure. The plan aims to increase Net Tonne Kilometers from Sh3.38 billion in 2022 to Sh5.20 billion and the number of passengers from 5.71 million to 8.8 million by 2027.

The corporation also aims to increase the rail market share of port throughput from 26 percent in 2022 to 42 percent, achieving a customer acquisition ratio of 1:4 and an 80 percent customer retention rate and satisfaction index.

KR intends to raise its local to transit cargo mix from the current 68:32 to 56:44 by establishing cargo handling facilities at border points and partnering with the private sector for investment in specialized wagons and equipment. The operationalization of MV Uhuru II is also included.