A Railway With Three Price Tags: Kenya Must See the KSh 651B SGR Loan FirstA Railway With Three PriceTags: Kenya Must See theKSh 651B SGR Loan First

A National Treasury report dated October 2026 now puts the 369km extension of the Standard Gauge Railway (SGR) from Naivasha through Kisumu to Malaba at KSh 651B ($5.01B), up from KSh 502.9B ($3.87B) a year earlier, according to the Treasury estimates.

It expects KSh 618.8B ($4.76B), about 95 shillings in every 100, to come from outside lenders, and says it is not yet clear how that money will be raised. Our position is simple: not one shilling of that loan should be signed until Parliament and the public have read its terms.

Three price tags in two years

The railway's price has refused to sit still. In November 2024, as a Chinese delegation toured the Nairobi terminus to assess the project, the figure attached to it was KSh 648B ($4.99B). The Treasury's estimate a year ago was KSh 502.9B.

When President William Ruto launched construction in March 2026, the cost was given as more than KSh 500B. Now it is KSh 651B.

A project that cannot hold its price for twelve months has not finished explaining itself. The Treasury's figures link the latest jump to the high cost of financing the line, which is exactly the part Kenyans cannot see. If a large slice of that KSh 148B is interest and fees rather than steel, tunnels and bridges, taxpayers are being asked to pay more for money, not for railway.

On Mwenendo's arithmetic, the new bill works out at about KSh 1.76B ($13.58M) for every kilometre of track. It is also almost equal to the $5.08B (about KSh 659B) Kenya borrowed from China's Export-Import Bank to build the two phases already running from Mombasa to Naivasha.

The first SGR loan never paid itself

Kenya has been here before, and the lesson is written in its own accounts. As Mwenendo has explained, the deal that built the first phases routes every shilling of SGR revenue into a locked escrow account that must hold a KSh 25B ($192.44M) minimum before any surplus can go to the lender. That floor has never been reached.

The result is that railway earnings and loan repayments sit in separate boxes. The Treasury says arrears on the project had climbed to KSh 413.4B ($3.18B) by June 2025, and it budgeted KSh 129.9B ($999.92M) for repayments on Chinese loans in the year to June 2026, most of it for SGR debt. The money came from the national budget, not from ticket and freight sales.

That is not a failure of trains. Mwenendo has reported that the SGR now earns enough to cover its daily running costs. It is a failure of contract design, agreed out of public view, which left taxpayers to carry a debt the asset was supposed to service. Signing a second, larger loan without first reading its clauses would repeat the mistake knowingly.

The cost of KSh 148B in plain sight

The increase alone deserves scrutiny. It is close to 30 times the KSh 5B ($38.49M) top-up the President promised the Hustler Fund before the end of the year, and about twice the KSh 71.09B top-up for counties that the President signed into law this week. Those sums were argued over in public. The KSh 148B rise arrived in a Treasury report.

Every shilling borrowed abroad for this line will be repaid in foreign money from future budgets, competing with salaries, clinics, school capitation and the pending bills Kenyan suppliers are still waiting on. The figures suggest that the railway's real cost to households will be decided less by the price of rail than by the interest rate, the currency, the grace period and any clause that ties revenue or cargo to the lender.

The case for building, and its limits

The strongest argument for pressing ahead is a good one. A standard gauge line that stops at Naivasha leaves Mombasa's cargo to finish its journey by road, and the corridor's value depends on reaching Uganda, one of Kenya's biggest export markets. Construction has started, and stopping now would waste what has been spent and leave western Kenya waiting again. Delay has its own cost.

We accept that. Our argument is not against the railway. It is against signing for it blind. Publishing terms before signature does not stop a project; it stops a bad deal. A loan that cannot survive being read by Parliament is a loan Kenya should not take.

Our demands of the Treasury and Parliament

We call on the National Treasury to publish its October 2026 cost report for the Naivasha to Malaba line by 30 November 2026, with a line-by-line account of the KSh 148B increase that separates construction from financing costs.

We call on the Treasury to name the proposed lenders for the KSh 618.8B and to table the draft financing agreement before the National Assembly before any signature. That draft must show the interest rate, the currency, the repayment period and any escrow, revenue or minimum-cargo clause of the kind that has kept the first loan from paying itself.

We call on Kenya Railways to publish the commercial viability study and the freight forecasts behind the extension, including what Uganda has committed to carry on the line.

And we call on the National Assembly's Public Debt and Privatisation Committee to hold public hearings on the financing before the Treasury commits Kenya to a shilling of new borrowing for this railway.

Kenya is still paying for one SGR loan whose full terms the public has never been shown. The Treasury now has a second chance to do this in daylight, and no excuse for wasting it.