The government has allocated Sh4.8 billion to fast-track the full transition of the Standard Gauge Railway (SGR) to Kenyan control and lay the foundation for its much-anticipated extension to the Malaba border, in a strategic push to lower costs and enhance regional trade.
According to budget documents tabled in the National Assembly, the funds will support critical infrastructure upgrades that will enable Kenya Railways Corporation (KRC) to take over full operation of the SGR from Chinese firm Afristar by the end of 2025.
A major portion of the funds—Sh2.31 billion—has been earmarked for the establishment of a locomotive overhaul workshop, a facility that will allow Kenya to maintain its locomotives, carriages, and rolling stock locally, thereby reducing reliance on foreign expertise and cutting maintenance costs.
Another Sh2.2 billion will go toward the procurement of locomotive wheelsets, essential components for ensuring safe and efficient rail transport.
To further localize operations, the government has also set aside Sh300 million to modernize the passenger ticketing system, replacing the current one managed by Afristar since the SGR began operations in 2017.
“These investments will improve reliability and create regional logistics hubs that are essential for Kenya’s position as a transport gateway to East Africa,” said Kenya Railways in a March statement.
The new allocations form part of a broader government strategy to reduce the Sh18 billion annual operational cost of running the SGR under Afristar’s management—a burden that has long drawn criticism over sustainability.
KRC had already assumed control of about 90 percent of SGR operations by mid-2023, but the upcoming upgrades are seen as pivotal in completing the transition and ensuring smoother, more affordable service delivery.
