During the swearing-in of Deputy President Kithure Kindiki on November 1, 2024, President William Ruto lamented that for two years, he lacked a principal assistant to effectively communicate his administration’s vision.
With Prof Kindiki now in office, Kenyans have every reason to expect fresh energy in addressing the challenges the country faces.
An ideal starting point for this renewed momentum should be the Kenya Railways Corporation (KRC), a public institution steeped in inefficiency and corruption that has burdened Kenyans for far too long.
Kenya Railways holds vast tracts of valuable land across the country, particularly in Nairobi where its prime real estate has been squandered through either neglect or shady deals.
Years of systemic corruption have turned this institution into a financial black hole and a legal liability that not only fails to serve Kenyans but also drains public coffers with unnecessary costs.
If the Kenya Kwanza administration is committed to reforming public sector governance, then the long-overdue overhaul of Kenya Railways must begin immediately.
Squandered promise of foreign investment
One of the gravest issues at Kenya Railways involves its fraudulent treatment of international investors.
The parastatal has lured foreign companies with promises of land for development only to subject them to a bewildering maze of delays, red tape and broken commitments.
Numerous investors have had to endure costly and protracted court battles abroad to seek redress for the damages they have suffered.
Take for instance the case of Mohamed Bin Ahmed Twar Al Kuwari, the Vice Chairman of Qatar’s Chamber of Commerce and Industry. In 2021, Al Kuwari, under his company, Bin Twar & Partners Group, set out to make a sizable investment in Kenya through his subsidiary, Arkan Real Estate Development Limited.
Responding to a clear demand for modern real estate solutions in Nairobi and Mombasa, he aimed to develop both residential and commercial properties in these areas.
Al Kuwari’s commitment to Kenya was met with enthusiasm by Kenya Railways, which promised him prime plots for his ambitious projects and facilitated meetings with the President, high-level managers and engineers.
These public officials offered Al Kuwari assurances about the land’s availability, leading him to invest millions of dollars in feasibility studies, evaluations and the establishment of a Kenyan subsidiary.
However, despite repeated promises, Kenya Railways failed to deliver the agreed-upon land. Instead, it kept the investor on a merry-go-round of delays, excuses and false assurances.
High-ranking officials at Kenya Railways consistently assured Al Kuwari’s team that the project would proceed, only to backtrack at critical moments.
As a result, Al Kuwari’s company faced delays due to unaddressed obstacles, including illegal occupants and unresolved disputes over the land. Eventually, Kenya Railways offered Al Kuwari alternative plots, but even these substitute options never materialised into actual, usable property.
The cost of these unfulfilled promises is not just financial for either Al Kuwari or Kenya. It has damaged Al Kuwari company’s credibility and undermined Kenya’s attractiveness as a destination for foreign investment.
Foreign investors have started to question the reliability of Kenya’s business environment. The incident has also escalated into a diplomatic issue that could erode Kenya’s relationship with Qatar and other potential partners from the Gulf region.
Impact of Kenya Railways’ dysfunction
The Al Kuwari debacle is not an isolated case. Kenya Railways’ shady dealings have embroiled it in numerous legal disputes across multiple jurisdictions.
There are cases pending in Switzerland, France and now the possibility of proceedings at the World Bank-funded International Centre for Settlement of Investment Disputes (ICSID) in Washington, DC.
These disputes are costly and not just in terms of legal fees. There is also the toll they take on Kenya’s reputation. Who wants to invest in a country where government agencies fail to honour contracts despite assurances from its president?
The wastefulness within Kenya Railways, unfortunately, goes a lot further than the treatment of investors. Like so many public institutions, it also involves blatant disregard for Kenya’s public resources, which are used as leverage for personal gain rather than national development.
In one such case involving the Dupoto/Dafur Settlement Welfare Scheme, KRC’s land dealings disproportionately benefited private law firms and a handful of individuals, while sidelining the legitimate land rights of local Maasai communities.
The deals brokered in such cases frequently involve massive sums of taxpayer money funneled to a handful of beneficiaries, while the communities affected by land seizures are left in limbo.
That is why the mismanagement at Kenya Railways cannot simply be brushed aside as incompetence; there are intentional schemes to siphon public resources. An example is the Duporto land compensation case.
Such scandals raise an important question: Are the officials appointed to head public institutions there to serve the people, or are they the main impediment to our country’s progress?
Instead of safeguarding the fiduciary responsibility entrusted to them, many use their positions to enrich themselves. For instance, Kenya Railways receives funds from the Exchequer, with the expectation that these resources will improve infrastructure, not line the pockets of unscrupulous executives and well-placed lawyers.
Just last year, the Exchequer allocated Sh2.7 billion to Kenya Railways. This is a substantial sum that should have gone into development. But, as is often the case, these funds ended up benefiting a few insiders with dubious claims rather than serving the public good.
Way forward
To address the chronic dysfunction at Kenya Railways and unlock Kenya’s potential, an independent audit of the parastatal’s operations, financial dealings and international agreements is needed. Indeed, it is overdue. This audit should examine every public-private partnership, contract and letter of intent to ensure they are above board.
By exposing misuse and holding individuals accountable, such an audit would be the first critical step toward restoring public trust and setting Kenya Railways on a path to genuine reform.
The Auditor-General should report these findings to Parliament on a quarterly basis to maintain transparency and ensure that Kenya Railways’ leadership is held to account.
We also need a comprehensive inventory of the corporation’s assets and a detailed breakdown of its financial dealings.
The parastatal’s vast land assets represent untapped value that could be used to finance much-needed upgrades to our transport infrastructure.
And instead of allowing dilapidated railway cars and neglected rail tracks to rust away, KRC could also sell or auction these assets to generate revenue.
Refurbishing or repurposing these assets would raise capital that could be reinvested in modernising Kenya’s rail network and expanding services to underserved areas.
A strategic sale or lease of Kenya Railways’ unused properties could provide the capital injection required to transform the organisation from a liability into a national asset.
However, while there is currently a lot of chatter about privatising parastatals, we must be cautious. Privatisation without oversight is not a solution, it is an invitation to perpetuate corruption on a grand scale.
As leaders, we must ask ourselves this pressing question: Are we considering privatisation for the public good, or to enrich a few insiders? Transparency, accountability, and public scrutiny must be at the forefront of any privatisation effort.
Parliament must also hold Kenya Railways’ management to account for every shilling they spend and every promise they make to investors. This level of accountability is not just essential for Kenya Railways but for any public institution that serves the Kenyan people. We must make an example of Kenya Railways.
In my role as Senator, I am committed to pursuing a national audit of all public institutions, from agricultural boards to transport authorities. We cannot continue to watch as billions of shillings disappear into the pockets of a few while our country struggles under a heavy debt burden.
The time for empty promises is over. Kenyans deserve a government that not only pledges to fight corruption but acts decisively to eradicate it from every level of society.
Only through decisive action against corruption will we create the Kenya we all dream of; one where public resources are safeguarded for the benefit of every citizen, and institutions like Kenya Railways serve the people, not a privileged few.
The country finds itself in a precarious position. We have a choice to either continue with business as usual or demand real change from our public institutions.
If President Ruto is serious about combating corruption, then his administration must prioritise reforms at Kenya Railways. We have too easily forgotten that this is an institution that has potential to attract genuine investment, create jobs and contribute to Kenya’s economic growth.
However, this will only be possible if we root out the culture of corruption that has defined Kenya Railways for far too long. Let the clean-up commence!
– By Ledama Olekina, ODM Senator for Narok County.
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