Report Flags Cost Surge and High Corruption Risks in SGR Project

A new report by Transparency International Kenya has raised serious concerns over governance failures in the Standard Gauge Railway project. The assessment gave the SGR a corruption risk score of 4.49 out of five.

The original Sh539 billion loan for the first two phases has grown to Sh737.5 billion due to accumulated interest from delayed repayments. Researchers blame limited due diligence and opaque processes for the financial strain.

The report examined both the broader governance environment and the role of the Kenya Railways Corporation. It identified weak transparency in procurement and secrecy around contracts as major red flags.

Public participation was inadequate during key decisions. Disclosure of full project costs and financing arrangements remained limited, making independent scrutiny difficult.

Dispute resolution clauses directed conflicts to arbitration in Beijing. Confidentiality provisions further restricted public access to contract details.

The SGR was largely investor-led with heavy external financier influence. This model reduced local oversight according to the report findings.

Kenya loses more than Sh600 billion annually through stalled and mismanaged infrastructure projects. The SGR case highlights recurring weaknesses in public investment processes.

Recommendations include proactive publication of project documents and contracts. Stronger parliamentary oversight and improved whistleblower protections are also suggested.

The report reviewed three major infrastructure projects between September 2025 and March 2026. It rated Kenya’s overall governance environment at a high corruption risk score of 4.125 out of five.

Weak implementation of access to information laws and public finance management regulations contributed to the vulnerabilities. Elite influence in decision-making remains a persistent challenge.

The SGR was launched under former President Uhuru Kenyatta as part of Vision 2030. Phase one from Mombasa to Nairobi was mostly Chinese-funded while the second phase extended to Naivasha.

Transparency International Kenya Executive Director Sheila Masinde stressed the need for fiscal discipline. She called for public declarations on individuals and firms involved in major contracts.

The findings arrive as plans for SGR extensions to Malaba continue. Lessons from the initial phases should inform future projects to avoid similar pitfalls.