In 2024, the number of passengers using the Standard Gauge Railway (SGR) in Kenya saw a significant decline, marking the first drop since the Covid-19 pandemic. This decrease was largely attributed to a sharp increase in ticket prices, which soared to as high as Sh1,500 at the beginning of the year. Despite the drop in passenger numbers, the increase in ticket prices led to a notable surge in revenue, highlighting a complex relationship between ridership and financial performance.
The Kenya Railways Corporation (KRC) reported that 2.44 million passengers used the SGR in 2024, down 10% from the 2.72 million passengers recorded in 2023. The decline in passenger numbers came as a direct result of the fare hike, which significantly impacted affordability for many travelers. The price increase was aimed at covering the operational costs of the railway system and ensuring its sustainability, but it also created a barrier for some regular commuters who could no longer afford the higher fares.
While fewer people were using the SGR, the sharp rise in ticket prices had a remarkable effect on the railway’s revenue. The fare increase helped boost total revenue to Sh4.09 billion in 2024, marking a 39% increase from Sh2.93 billion in the previous year. This revenue boost reflected the success of the fare hike in terms of generating more income per passenger, even though fewer people were traveling.
The decision to raise ticket prices was a difficult one for the Kenya Railways Corporation, as it had to balance financial sustainability with passenger demand. The railway system, like many others worldwide, faces ongoing challenges related to the cost of operations, including maintenance, fuel, labor, and infrastructure development. The fare hikes were a necessary measure to help address these challenges, but the impact on passenger numbers raised questions about the long-term viability of such pricing strategies.
The decline in ridership also highlights a broader issue in Kenya’s transportation sector: the affordability of public transportation. As ticket prices rise, many people, particularly those in lower income brackets, are forced to seek alternative means of transport, often at a higher personal cost. This trend is concerning for public transport systems like the SGR, which aim to provide an affordable, reliable, and sustainable alternative to road transport.
Despite the challenges, the increased revenue generated by the fare hikes has allowed the Kenya Railways Corporation to reinvest in the SGR’s operations. This financial boost is crucial for ensuring the continued development of the railway infrastructure, as well as improving service quality for the remaining passengers. The investment in modernizing and expanding the SGR network is seen as vital for the future of rail transport in Kenya, as it positions the system to handle increasing demand in the years to come.
Looking ahead, it remains to be seen whether the Kenya Railways Corporation will be able to strike a balance between maintaining fare prices that generate sufficient revenue and keeping transportation accessible to a wide range of passengers. The key will be finding a pricing structure that accommodates the financial realities of both the railway operator and its users. As the SGR continues to play a critical role in Kenya’s transportation network, finding ways to maintain both high revenue and ridership levels will be essential to its long-term success.
