Technical Efficiency of Railway Transport System in Kenya: A Case of the Standard Gauge Railway Transport System
| dc.contributor.author | Ndung’u, Francis M. | |
| dc.date.accessioned | 2025-08-01T13:37:54Z | |
| dc.date.available | 2025-08-01T13:37:54Z | |
| dc.date.issued | 2025-04 | |
| dc.description | A Research Project Submitted to the Department of Economic Theory in the School of Business, Economics and Tourism in Part Fulfilment of the Requirements for the Award of the Degree of Master of Economics (Policy and Management) of Kenyatta University, April 2025 Supervisor; 1.Charles N. Mugendi | |
| dc.description.abstract | An efficient, effective, and reliable transportation system is essential for urban living and international trade and plays a crucial role in shaping a region's layout and socioeconomic development. Rail transport dates back nearly 500 years includes systems with man or horsepower and wooden/stone rails. Rail transport was identified under the African Union’s Agenda 2063 as a key infrastructure for stimulating trade, inclusive growth and sustainable development across the continent. It is envisaged that by 2063, there will be a harmonized continental High-Speed Train Network connecting all the major cities/capitals of the continent therefore spurring intra-African trade to unprecedented levels and strengthening Africa’s place in global trade. This has seen various Standard Gauge Railway projects on the continent, for instance, the Proposed Standard Gauge Railway Connecting Ethiopia and Sudan. Development of the Standard Gauge Railway in Kenya began in 2014 with the construction of a rail line spanning 472 kilometers between Mombasa and Nairobi, Phase 1A. In 2017, Phase 2A was constructed, which entailed the construction of a rail line between Nairobi and Naivasha spanning 120 kilometres. In previous years, railway transport in Kenya suffered from several problems and limitations. They included poor maintenance due to an inadequate maintenance budget, low equipment availability of approximately 50%, and narrow gauges limiting the commercial speed to 40 kph. According to Kenya Railways' Strategic Plan 2023-2027(Kenya Railways Corporation, 2023), the Corporation has been unable to derive maximum value from its assets and also to meet the growing market demand. This is a clear revelation that the SGR freight transport system needs to be efficient to meet the high demand of the growing market. Also, one of Kenya Railway’s strategic goals in the plan is to improve rail asset technical and operational efficiency by optimizing rail assets availability, reliability and utilization for increased Net Tonne Kilometres. With that, the study sought to investigate the level of technical efficiency of the standard gauge railway freight transport system in Kenya for the period, Financial Year 2018/19 to Financial Year 2023/2024. To achieve the objectives of the study, a non-experimental research design was adopted. The variables in the model included: Input Variables: - Fuel consumption, Reliability of locomotives and Distance covered. Output Variables: Revenue generated and Net Tonne Kilometre. Stochastic Frontier Analysis results were further subjected to regression analysis using the Tobit model to determine the factors influencing the technical efficiency of the standard gauge railway transport system in Kenya. The study revealed the average technical efficiency levels of 0.94(94%) for the Net Tonne Kilometer model and 0.873(87.3%) for the revenue model. The technical efficiency levels for Net Tonne Kilometer model demonstrated that the railway system is highly effective in managing freight transportation with only minor inefficiencies limiting its potential. However, the slightly lower average technical efficiency levels for the revenue model underscore a gap in translating operational success into financial performance. The inclusion of macroeconomic variables such as inflation and exchange rates in the models further revealed their nuanced effects, with inflation negatively impacting efficiency and exchange rates showing a mild positive association. The study therefore concluded that while the Standard Gauge Railway freight services exhibit high technical efficiency in freight handling at 94%, there is a notable gap in financial performance, with revenue efficiency at 87.3%. To address this, disconnect, policymakers are encouraged to adopt enhanced pricing strategies, cost management, and adaptability to macroeconomic factors, which are crucial for maximizing the SGR’s transformative role in Kenya’s socioeconomic development and regional integration goals. | |
| dc.description.sponsorship | Kenyatta University | |
| dc.identifier.uri | https://ir-library.ku.ac.ke/handle/123456789/31027 | |
| dc.language.iso | en | |
| dc.publisher | Kenyatta University | |
| dc.title | Technical Efficiency of Railway Transport System in Kenya: A Case of the Standard Gauge Railway Transport System | |
| dc.type | Software |