NAIROBI, Kenya – The government has set aside Sh4.8 billion to accelerate the transition of the Standard Gauge Railway (SGR) to full local control and lay the groundwork for its extension to the Malaba border, in a move aimed at reducing operational costs and boosting regional trade.
According to budget documents tabled in the National Assembly, the funds will support key infrastructure upgrades critical to shifting SGR operations from Chinese contractor Afristar to the Kenya Railways Corporation (KRC), which is expected to take over full control by the end of 2025.
The bulk of the allocation—Sh2.31 billion—will go toward setting up a locomotive overhaul workshop, a facility that will enable local maintenance of trains, carriages, and rolling stock.
An additional Sh2.2 billion has been earmarked for the purchase of locomotive wheelsets, vital components that allow trains to operate safely and efficiently on rail tracks.
The government has also allocated Sh300 million to upgrade the passenger ticketing system, replacing the one currently managed by Afristar since SGR began operations in 2017.
The planned investments are part of a larger strategy to make the SGR financially sustainable, as concerns mount over its hefty operational costs.
Past Treasury disclosures revealed that taxpayers have been footing an annual bill of at least Sh18 billion to keep the railway running under Afristar’s management.
KRC, which had taken over about 90 percent of SGR operations by mid-2023, has cited the new overhaul workshop as a critical asset in maintaining and extending the railway’s lifespan—particularly as the government eyes a major extension of the line through Kisumu to Malaba.
The planned extension, which will eventually connect Mombasa to Uganda via western Kenya, is estimated to cost more than Sh500 billion.
The Naivasha–Kisumu stretch is projected at Sh380 billion, while the Kisumu–Malaba leg could cost Sh122.9 billion.
KRC also plans to establish commercial and logistics hubs along both the metre gauge and standard gauge networks to strengthen freight handling and trade efficiency.
“These investments will improve reliability and create regional logistics hubs that are essential for Kenya’s position as a transport gateway to East Africa,” KRC said in a March statement.
