World Bank Says Kenya Could Have Saved KSh117 Billion on SGRWorld Bank Says Kenya Could Have Saved KSh117 Billion on SGR

The estimate, equivalent to about KSh117 billion (US$900 million), appears in the lender's November 2026 Kenya Economic Update. It compares the cost of Kenya's diesel-powered railway with higher-specification electrified lines in Tanzania and Djibouti.

The World Bank says at least 30 per cent of the potential savings is attributable to governance problems, including direct contracting instead of competitive tendering, land speculation and alleged fraud involving land titles, valuations and compensation. The KSh117 billion figure is a hypothetical cost comparison. It is not a confirmed amount stolen or money the government can automatically recover.

How the railway costs compare

The World Bank puts the construction cost of the Mombasa-Nairobi section at about KSh988 million per kilometre. The Tanzania line connecting Dar es Salaam to Dodoma cost about KSh741 million per kilometre, while the Djibouti-Addis Ababa railway cost about KSh689 million per kilometre.

The projects were not identical. Railway costs are affected by terrain, engineering requirements, land acquisition, construction timing and the type of railway built. The lender nevertheless argues that Kenya's costs were high even when compared with lines that were electrified or faced more difficult terrain.

Applying Tanzania's cost measure to Kenya's railway produces the estimated potential saving of up to KSh117 billion. People Daily's account of the report stresses that the figure should not be read as proof that the entire difference was caused by corruption.

The governance questions

The World Bank identifies the way the project was awarded and the handling of land compensation as areas that may have raised costs. The initial Mombasa-Nairobi railway was financed through loans from China Exim Bank and built by China Road and Bridge Corporation. The contractor also conducted the feasibility study, with approval from Kenya Railways Corporation.

The lender argues that direct contracting can weaken competition and price checks. It also points to land speculation and fraud risks around title records, valuation and compensation. These are governance concerns identified in the report, not a court judgment establishing criminal liability across the project.

The railway's land compensation process has previously faced corruption allegations. In 2018, former Kenya Railways managing director Atanas Maina and former National Land Commission chairman Mohammed Swazuri were arrested over alleged graft linked to compensation for land acquired for the railway. Those allegations must be kept separate from the World Bank's new cost comparison.

A bill taxpayers are still paying

Kenya borrowed about KSh649.9 billion through three loans in 2014 and 2015 to build the railway from Mombasa to Nairobi and extend it towards Naivasha. The loans were initially due to be repaid by 2035.

The government later extended the repayment period to 2040 and converted the facilities from dollar-denominated loans into yuan. Treasury said the restructuring was expected to save about KSh27.9 billion a year, although detailed terms have remained restricted under the government-to-government arrangements with China.

Revenue from railway operations is held in an account that supports repayment of the loans. The cost of the project therefore remains relevant to public finances and the money available for other priorities.

Kenya is considering extending the railway from Naivasha towards Kisumu and Malaba. The government has said it intends to seek alternative financing for the next phase rather than rely on the same Chinese financing structure.

What the findings mean for future projects

The World Bank recommends stronger competition in public procurement, wider access to contract information, better publication of public-project data and greater transparency about the beneficial owners of companies that win government contracts.

Those measures matter because infrastructure projects are paid for through taxes, borrowing and user charges. When a project costs more than necessary, the extra burden can reduce funds available for health, education and other services, or add to the debt future taxpayers must repay.

The KSh117 billion estimate should be understood as a warning about value for money, not a recoverable cash balance. The central question for future projects is whether Kenya can publish contracts, compare bids properly, scrutinise land compensation and disclose enough information for taxpayers to follow costs from approval to completion.

The World Bank's report does not settle every question about the SGR's final cost. It does provide a regional benchmark that puts procurement and project oversight back under scrutiny. Readers can also follow Mwenendo's coverage of Grit's planned sale of its Kenyan property portfolio, another case where large investment decisions meet questions about capital and financing.