Kenya would not be grappling with a massive repayment burden on the Standard Gauge Railway (SGR) had the government conducted proper due diligence before embarking on the project, a new report by Transparency International (TI) Kenya has found.
The report, Corruption Risk Assessment of Infrastructure Projects in Kenya, paints a grim picture of how governance failures, opaque procurement processes and weak oversight mechanisms turned one of the country’s flagship infrastructure projects into a major corruption risk and debt burden.
According to the report, the SGR recorded the highest corruption risk among three major infrastructure projects assessed between September 2025 and March 2026. Using the Infrastructure Corruption Risk Assessment Tool (ICRAT), researchers assigned the railway project a vulnerability score of 4.49 out of five, categorising it as having a very high corruption risk.
“By November 2024, the original Sh539 billion loan used to finance the first two phases had ballooned to Sh737.5 billion due to accumulated interest from delayed repayment. The cost is too much for a struggling country,” the report notes.
The assessment examined both Kenya’s broader governance environment and the institutional framework surrounding the Kenya Railways Corporation, the agency responsible for implementing the project.
Researchers identified several weaknesses that contributed to the high risk rating, including limited transparency in procurement, secrecy surrounding contracts, weak grievance mechanisms, inadequate public participation and insufficient disclosure of project costs and financing arrangements.
President William Ruto launches the landmark construction of the Naivasha-Kisumu-Malaba Standard Gauge Railway line in Narok on Thursday, March 19, 2026.
Photo credit: PCS
The findings come as Kenya continues to service the multibillion-shilling railway project, launched during the administration of former President Uhuru Kenyatta as a cornerstone of the country’s infrastructure modernisation agenda. The railway, envisioned under Kenya’s Vision 2030 blueprint, was designed to connect the Port of Mombasa to Nairobi and later extend to Naivasha with planned expansion to Kisumu and Malaba. However, Transparency International argues that poor project selection processes and governance failures undermined its intended economic benefits.
The report notes that Phase One cost approximately Sh490.9 billion, with 90 per cent of the funding sourced from Chinese loans. The second phase, extending the line from Nairobi to Naivasha, cost an additional Sh193.8 billion. The organisation argues that the financial strain could have been mitigated had the government subjected the project to more rigorous due diligence and scrutiny before approval.
The report further raises concerns over the manner in which the project was selected and approved, describing it as an investor-led, non-public process. Under this model, key decisions were heavily influenced by external financiers and contractors, with limited public oversight.
Transparency International Kenya Monitoring, Evaluation, Research and Learning (MERL) Coordinator Caroline Maina said this framework created opportunities for weak accountability and reduced scrutiny of critical decisions.
The report also flagged heavy reliance on external financing, limited parliamentary oversight, and restricted public access to information as major warning signs that should have attracted greater scrutiny during the planning phase. It further revisits longstanding concerns over procurement irregularities surrounding the SGR, pointing to previous court findings that questioned the legality of procurement procedures used in awarding contracts for the railway. Among the most troubling findings was the secrecy surrounding contractual arrangements.
The study found that full project costs, loan agreements and expenditure details were not readily available to the public, making it difficult for citizens and oversight institutions to independently assess value for money.
“We are not against development, but there must be fiscal discipline and accountability. Are the processes transparent? Declarations must be made public on individuals getting these contracts. This is borrowed money, and Kenyans bear the cost of repayment,” said Transparency International Kenya Executive Director Sheila Masinde.
The report also highlighted dispute resolution clauses requiring conflicts arising from the project to be handled through arbitration in Beijing, China. It further noted that confidentiality provisions prevented parties from publicly disclosing information obtained during contract execution. The lobby argues that such arrangements limited transparency and complicated accountability efforts. The findings come against a broader backdrop of governance challenges affecting infrastructure development in Kenya. The report notes that the country loses more than Sh600 billion annually through stalled and mismanaged public infrastructure projects.
Kenya’s overall governance environment was also rated as high risk with a corruption risk score of 4.125 out of five. Among the factors cited were gaps in whistleblower protection, persistent perceptions of corruption, weaknesses in public procurement systems, and the influence of elite networks in public decision-making. The report also highlights shortcomings in the implementation of key laws such as the Access to Information Act and the Public Finance Management Act, noting that compliance remains inconsistent.
Transparency International concluded that weak public participation, inadequate documentation, opaque procurement systems and vested interests remain recurring weaknesses across major public investments.
To address these shortcomings, the organisation recommends proactive publication of project selection documents, contracts, and implementation reports, as well as strengthened parliamentary oversight.
As the government prepares for new large-scale projects including the planned extension of the SGR from Naivasha to Malaba, the report cautions that lessons from the railway’s implementation must not be ignored.
