Tuesday, 4 December 2012

Is Nairobi Commuter rail service sustainable?


The commuter train service:a 30 year concession
ALTHOUGH PESSIMISTS DOUBT the survival of the Nairobi commuter rail service, an analysis of business variables tells the opposite story -the project is viable and sustainable. In fact, it could turn out a money spinner. The operation of the service will be in the private sector’s hands for an estimated 30 years concession. 

Sentiment and necessity favour rail transport which is clean in terms of pollution, transports many people and is relatively safe and affordable.


Commuter Rail service world-wide are geared to ease traffic jams in cities by persuading motorists to leave their cars at home and ride the train. They are thus designed to be faster-reliable –safer and affordable alternative to cars. Therefore passenger car traffic on the competing roads is critical inputs in assessing the viability of a commuter rail service.
Studies show that the proposed commuter rail routes are on heavily trafficked roads in the city. Traffic Population surveys show that Jogoo road and Mombasa roads boast of the highest population of motor vehicles per day in the city.

The same study also shows that cars dominate the roads in the city. Mombasa road has the highest population of cars at 78 per cent. On Jogoo road, says the study, cars form 55 per cent of the traffic population.  Cars generally carry no more than driver. Consequently traffic snarl-ups on these roads are chronic.
Traffic snarl up on Mombasa road

The commuter service will initially comprise of three modern inter-modal railway stations that consist of a huge parking space for cars and also a parking for passenger service vehicles. Makadara station off-jogoo road will boast of parking for 5000 cars; Imara Daima, designed to serve 2000 passengers will have a parking for 150 cars. While Syokimau Station, designed to sever 10,000passengers a day, will have a parking space for 2500 cars. 

The feather in the cap for the service is the high speed line serving JK International airport. The airport serves an estimated 6.5 million travelers and years and is still counting. By the time the Greenfield terminal at the airport is completed say, in 2020, the population of travelers through the airport will rise to 12 million and onwards to 20 million. The entire project is expected to serve an estimated 15 million passengers initially rising to 60 million passengers by the time the whole project is complete.

The initial service will comprise of six coaches each with a capacity of 200 passengers. That is 1200 per trip lasting just about 30 minutes or less. On the road, that trip can last up to 90 minutes according to Kenya Railways corporation’s estimates. It can go up to 120 minutes in some instances. That trip in the case of Syokimau station will cost US$1.5 one way. It could be more or less depending on the station. Parking will cost another US$2.4 per day. It is not clear what Nairobi CR’s IRR is. However, similar services elsewhere in the world operating in similar circumstance have an IRR of 15-20 per cent.

Despite what seems like exorbitant cost, motorists will save big, providing them with an incentive to leave their cars home and take a ride. Currently, motorists waste up to two litres of fuel in traffic jams one way. For commuters to and from work, that is four litres wasted a day. At the current price per litre, motorists waste up to $6.7 worth of fuel a day. At the CBD, Parking costs US$1.65 a day and it could take up to an hour of waiting for a parking space.

 So motorists spend an estimated US$8.35 a day on vehicles operations. If we factor in the waiting time for a parking space, we are talking about $20 worth wasted on traffic jams in the city per day, or a whole $600 a month. This is what Motorists will save themselves by riding a train to the CBD a month.

The service provider will also make a killing. According to its MD of the corporation Nduva Muli, a single round trip costs $1766. At the current prices, a round trip earns $2824 at full capacity. The break- even level is 756 passengers. These passenger numbers are available in the market. The conclusion then is that the commuter service is viable and profitable.  The corporation plans to operate five round trips a day, generating US$14,120 revenue per day. 

This analysis assumes away the parking fees per day which stands at US$2.4 per car pay day. The implication here is even the leans trips will be underwritten by parking fees.
As for traffic jam, the train will remove 1200 vehicles from the road one way. This means that a round trip will remove are 3500 per hour. With 2400 eliminated per day, only 1100 PCUs are left on the road increasing cruising speed to almost 60KM per hour on Mombasa road and Jogoo road. It will also reduce air pollution in the affected areas.


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