- The recommendations follow concerns regarding the SGR’s financial performance. The project has accumulated significant pending bills, often addressed through mid-year budget reviews. Operational costs have consistently exceeded revenues, with total debts to Afristar SGR amounting to $63.8 million (Sh8.2 billion) annually
- Since its launch in May 2017, the SGR’s operational deficit has gradually decreased, from Sh10.5 billion in the 2017/2018 financial year to Sh1.869 billion in 2021/2022. In the 2022/2023 financial year, a surplus of Sh159 million was recorded in container hauling. Despite these improvements, the project’s cumulative revenue from 2017/2018 to 2022/2023 amounted to Sh73 billion, compared to operational expenses of Sh100.7 billion
Members of Parliament have called on the Kenya Railways Corporation (KRC) to publish detailed reports on revenue collections, operational costs, and sources of financial support for the Standard Gauge Railway (SGR) amidst rising concerns over the project’s economic sustainability. The MPs emphasized the need for quarterly financial reports to be made available on the corporation’s official website to enhance transparency and accountability.
“The Committee recommends that the Kenya Railways Corporation publishes the quarterly financial reports of the Standard Gauge Railway (SGR) on its official website, detailing a breakdown of revenue collections, operational costs, and sources and the amount of any financial support to enhance transparency and accountability,” reads a report by a National Assembly committee.
The MPs have further directed KRC to assume full operations and maintenance responsibilities for the SGR by December 2025. This move is intended to cut operational costs, which have reportedly been a major challenge since the railway’s inception. According to the report by the Public Petitions Committee, chaired by Nimrod Mbai, delays in the phased handover of functions could exacerbate financial losses.
Currently, out of 52 operations and maintenance functions for the SGR, 46 are under KRC’s control, with the remaining six managed by Africa Star Railway Operation Company (Afristar). These six functions, critical to safety and continuity, include the Railway Signal System O&M, slated for takeover by December 31, 2024. The remaining functions—Passenger Train Operation, Freight Train Operation, Dispatch Centre Service, Train Marshalling, and Organisation Service—will be transferred by the end of 2025.
Financial Challenges and Operational Deficit
The committee’s recommendations follow concerns about the SGR’s financial performance. The project has accumulated significant pending bills, often paid through mid-year budget reviews. Operational costs have consistently outpaced revenues, with total debts to Afristar SGR amounting to $63.8 million (Sh8.2 billion) annually.
Since its launch in May 2017, the SGR’s operational deficit has gradually narrowed, from Sh10.5 billion in the 2017/2018 financial year to Sh1.869 billion in 2021/2022. A surplus of Sh159 million was recorded in container hauling in the 2022/2023 financial year. Despite these improvements, the project’s cumulative revenue from 2017/2018 to 2022/2023 totalled Sh73 billion, against operational expenses of Sh100.7 billion.
To address these challenges, the committee has urged KRC to take strategic measures, including:
- Finalizing the takeover of all operations and maintenance functions by December 2025.
- Investing in professional development for technical employees.
- Diversifying services through loyalty programs and special packages for students, senior citizens, and frequent travellers.
The MPs have also directed KRC to expedite the payment of pensions owed to former employees. This follows a petition by Mr Benson Mocheo, who served as a station manager from January 1968 to April 1985 and has yet to receive his pension. The committee recommended that KRC finalize payment to Mr Mocheo within 30 days of the report’s tabling and investigate any negligence by responsible officers.
“The Committee recommends that the Kenya Railways Corporation promptly and adequately pays the pension owed to Mr. Mocheo for his seventeen (17) years of service within thirty (30) days of the report being tabled,” the report states.
The MPs’ directives aim to ensure the SGR’s financial sustainability while promoting transparency and accountability in its operations. With the impending deadlines for operational takeovers and financial disclosures, all eyes will be on KRC to implement the proposed measures effectively and restore public confidence in the project.
