Kenya Railways contracted China Road and Bridge Corporation without competitive tender to build a standard gauge railway from Mombasa to Nairobi, financed mainly by China's Export-Import Bank. The Court of Appeal found in 2020 that the procurement broke the law, but the Supreme Court reversed that in 2023 and held it was a lawful government to government deal. Kenya has since released the loan agreements, converted most of the loans to yuan and begun building an extension to Malaba.
The Supreme Court's 2023 ruling that the procurement was lawful is final. Kenya is repaying SGR loans converted to yuan, and Kenya Railways began construction of the Naivasha to Malaba extension in July 2026, which the Treasury now puts at Sh651 billion, according to Business Daily. Kenya Railways said in March 2026 that the Naivasha to Kisumu phase would be complete by June 2027.
Kenya's Ministry of Transport and China Road and Bridge Corporation signed a memorandum of understanding on the railway on 12 August 2009, after a 28 October 2008 joint communique by the presidents of Kenya and Uganda, according to the Supreme Court's 2023 judgment.
Kenya Railways Corporation and CRBC signed the civil works contract on 11 August 2012 and a supply and installation contract for facilities, locomotives and rolling stock on 4 October 2012, the Supreme Court recorded. CRBC had submitted the feasibility study in February 2011, the court said.
A Finance Bill introducing the railway development levy was tabled on 18 June 2013, according to the Supreme Court judgment.
Okiya Omtatah Okoiti and another petitioner filed Petition No. 58 of 2014 challenging the procurement, and the Law Society of Kenya filed Petition No. 209 of 2014 on 14 May 2014. The petitions were consolidated on 27 June 2014, the Supreme Court recorded.
The financing agreement was signed on 10 May 2014, with China's Export-Import Bank funding 85 percent and Kenya 15 percent, according to the Supreme Court. Reuters reported the first loan as 1.6 billion dollars over 20 years at 2 percent interest with a seven year grace period, governed by Chinese law.
Justice Lenaola dismissed the consolidated petitions, holding that the procurement law did not apply under section 6(1) because the project was financed by a negotiated loan, and expunged documents the petitioners had obtained, the Supreme Court recorded.
President Uhuru Kenyatta made the inaugural trip on the 472 kilometre line, which an AA report carried by The Peninsula said cost 3.8 billion dollars.
President Kenyatta launched passenger services on Phase 2A, the roughly 120 kilometre line from Nairobi to Naivasha, which The Standard and The EastAfrican put at Ksh150 billion. Reuters reported that a second Exim Bank loan of 1.4 billion dollars was signed in 2015 for the extension.
Kenyatta launched freight train services to the Naivasha Inland Container Depot, The Standard and Xinhua reported. The EastAfrican later reported that the Kenyatta administration had directed that cargo move by SGR, a policy Ruto reversed in 2022. The date of that directive was not confirmed.
Judges of Appeal M.K. Koome, S. Gatembu Kairu and J. Mohammed partly allowed the appeal and declared that Kenya Railways failed to comply with Article 227(1) of the Constitution and sections 6(1) and 29 of the Public Procurement and Disposal Act. The court held that orders stopping the contract or quashing the award were no longer available because the contract had been executed, and ordered each party to bear its own costs.
In January 2022, after a court ordered disclosure, the government cited confidentiality and national security to withhold the contract, The EastAfrican reported. Reuters said the previous administration had cited confidentiality clauses after a court ordered publication earlier in 2022.
On the day of his inauguration President William Ruto ordered port operations moved to the Nairobi and Naivasha depots returned to Mombasa, The EastAfrican reported. The mandatory SGR policy had been meant to guarantee business to repay the debt, it said.
Transport Cabinet Secretary Kipchumba Murkomen released the loan agreements, Reuters and The EastAfrican reported. The EastAfrican said disputes go to the China International Economic and Trade Arbitration Commission and that the documents did not show the Port of Mombasa as collateral, which China's foreign ministry had denied.
The Supreme Court set aside the Court of Appeal judgment and held that the procurement complied with Article 227 and was a government to government contract exempt from the 2005 procurement act. It upheld the expunging of documents and ordered each party to bear its own costs.
Citizen Digital reported, after talks between Prime Cabinet Secretary Musalia Mudavadi and China's ambassador, that Kenya expected Chinese financing for the 475 kilometre Naivasha to Malaba extension, projected to cost over Ksh.720 billion. No signed agreement was reported.
Citizen DigitalAn aide to Treasury Cabinet Secretary John Mbadi told Reuters that Kenya was negotiating to convert the dollar SGR loans to Chinese yuan to cut repayment costs, Kenyans.co.ke and Citizen Digital reported.
Mbadi said most of the dollar loans owed to Beijing for the SGR had been converted to yuan, saving about 215 million dollars a year, with yuan repayments from January 2026, Business Daily reported. Reuters reported that Kenya had completed converting 3.5 billion dollars of the loans. Neither report gave the date the conversion took effect.
Business Daily reported that David Ndii, economic adviser to President Ruto, said the IMF and World Bank pressed Kenya to convert its SGR dollar debt to yuan because they objected to their dollar loans being used to pay China. No response from the lenders was reported.
Treasury said the loan terms require Kenya Railways to keep at least Sh25 billion in a special account, and Kenya was pressing China to review the terms, Business Daily reported.
Business Daily reported that the Treasury had renegotiated the three Chinese SGR loans, originally due to be repaid by 2035, into 15 year facilities running to 2040.
President Ruto launched the Naivasha to Kisumu section in Narok County, and Kenya Railways managing director Philip Mainga said that phase would be complete by June 2027, Citizen Digital reported. The South China Morning Post dated the groundbreaking 19 March.
Ruto and Ugandan President Yoweri Museveni launched the 107 kilometre Kisumu to Malaba section, which Citizen Digital said the Treasury estimated at over Ksh.500 billion. Daily Monitor reported Uganda had not yet secured funding for its Malaba to Kampala line.
Kenyans.co.ke, citing the South China Morning Post, reported that the government awarded the remaining sections to China Communications Construction Company and its subsidiary CRBC, at about Ksh700 billion, under a mix of public private partnership and public funding. The procurement method was not reported.
Kenya Railways officially began construction of the Naivasha to Kisumu to Malaba line in Narok County, Citizen Digital and Kenyans.co.ke reported. Kenyans.co.ke later reported that Kenya Railways said land surveys were under way before major civil works. A Business Daily caption dated the official start to 2 July 2026 at Kibos in Kisumu County.
Business Daily reported that a Treasury report put the cost of the Naivasha to Malaba extension at Sh651 billion, up from an earlier estimate of Sh502.9 billion, with Sh618.8 billion expected from external financiers. The paper said it was not yet clear how those funds would be raised.
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