Funding of Kenya’s standard gauge railway still shrouded in mystery as president Kenyatta exits power

Funding of Kenya’s standard gauge railway still shrouded in mystery as president Kenyatta exits power


When Kenya decided to build the standard gauge railway (SGR), it turned to China, which was then prompting its state-owned firms to find investment opportunities in Africa and other parts of the world. Even though it was financed by taxpayers, there was no competitive bidding for the project, a move Kenyatta defended.

Environmentalists questioned why the government routed the railway through Nairobi National Park, one of few wildlife parks anywhere adjacent to a capital city.

The project’s only known feasibility study was done by the Chinese contractor – not the government – which presented a conflict of interest, said Okiya Omtatah, a prominent civil rights activist who challenged the project in court.

He said he was invited to a Nairobi hotel to meet with several Kenyan senators and Chinese managers who asked him to withdraw the case in return for a $300,000 payout. When he declined, one of the senators offered up to $1 million, he said. He was told that if he refused, they could pay off a judge to decide the case in their favour.

“You keep your money and I will keep my country,” Omtatah recalled telling them as he left the room.

A communications officer with CRBC, the Chinese contractor, did not respond to emailed questions. Omtatah would not identify the senators he said he met with.

The court of appeal finally ruled in Omtatah’s favour, in 2020, declaring the railway’s contract illegal for flouting Kenya’s procurement laws. The government is appealing the decision to the Supreme Court.

Ruto has promised, if elected president, to publish the contract — a move that activists hope would allow the public to scrutinize it. A transport ministry official this year said that making the contract public would undermine national security because it would reveal its nondisclosure clauses.

Over the years, activists and opposition figures have accused senior politicians of inflating costs and profiting from the railway. Land acquisitions became a flashpoint too, with more than a dozen officials, including the former managing director of Kenya Railways and the former chairman of the agency that manages Kenya’s public land, charged in court in 2018, accused of facilitating more than $2 million in payments to individuals and companies that falsely claimed to own land along the railway.

While some cases have been dropped, trials of other defendants are continuing. Parliament disclosed that millions more were disbursed in overpayments or payments made without clear documentation.

A year after the train started operating, a parliamentary report showed it cost more than double the amount to transport goods on the train than on the road. To make the railway profitable, the authorities compelled importers to send cargo by railway instead of by road – a decision that set off protests and court cases.

Rashid, a Kenyan truck driver, has been on the road for 28 years. Truck drivers have lost their jobs since the railway began operation.

Officials in Mombasa said the railway cost their county tens of millions of dollars in annual revenues. One report estimated conservatively that over 8,100 people employed in the trucking, fuel and freight businesses in the county would lose their jobs.

Lawrence Boy, a truck driver in Miritini, a suburb of Mombasa, accused the government of “demonizing” truck drivers and leaving many young people jobless and turning to crime.

“We are citizens of this country,” he said, “and we deserve equal rights.”

At the Nairobi station, passengers board train cars painted with the slogan, “Connecting Nations. Prospering People.” But a poll taken in 2019-2020 by Afrobarometer found that 87 per cent of Kenyans believed their government had borrowed too much money from China.

Lawmakers have recommended the government renegotiate the railway’s loan with China. But even if they can, said Watima, the economist, the railway will remain a “serious mess.”

China, also, is reassessing its early lending spree on African infrastructure projects as it faces growing backlash for doling out loans to poor countries with shaky finances.

Even though China will remain the biggest financier of African infrastructure, Eric Olander, co-founder of the China Global South Project, said it was unlikely that risky megaprojects like the Kenyan railway would receive funding in the future.

“The sand in the hourglass has run out,” he said.

For now, the railway leaves Mombasa, cuts across Kenya’s iconic national parks and barrels past Nairobi before its tracks stop at a quiet hamlet near the town of Duka Moja, surrounded by dense bush and maize plants.

“They said this train was progress, but whose progress is it?” said Daniel Tipape, a motorcycle taxi driver, passing the dirt road near the rail’s finish line. “Sometimes we just build things for the sake of it,” he said.

  • The New York Times report
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