The Kenya Railways Corporation (KRC) has frozen the purchase and overhaul of hundreds of wagons and coaches, after the government took away Sh7.6 billion funding to facilitate the transactions.
Funding for the procurement had been budgeted for the fiscal year ending June and KRC had planned to purchase 800 wagons and 20 coaches, but the Treasury removed the funds in the second supplementary budget.
Kenya Railways planned to acquire 500 Standard Gauge Railway (SGR) flat wagons, 300 SGR wagons and 20 SGR passenger coaches, all at a cost of Sh5.9 billion.
Treasury, however, removed Sh3.4 billion funding from the project, causing Kenya Railways to freeze the acquisition of 250 SGR flat wagons, the 300 SGR wagons and 15 SGR passenger coaches.
The company now plans to purchase 250 SGR flat wagons and five passenger coaches at a cost of Sh2.46 billion, while purchase of all the 300 wagons has been postponed.
Kenya Railways also planned to overhaul 28 SGR locomotives at a cost of Sh1.17 billion during the current fiscal year but the plan has since been postponed after the funding was removed.
Another plan to overhaul 810 SGR wagons was halted following the withdrawal of Sh2.97 billion funding.
Under the two programmes, the company has a plan to overhaul a total of 1,620 SGR wagons and 56 SGR locomotives during a period of more than a year and the withdrawal of funding means the process could go beyond the 2025/26 fiscal year.
In total, the Treasury removed Sh7.6 billion funding that would have facilitated the acquisition of wagons, flat wagons, passenger coaches, and the overhaul of SGR locomotives and wagons.
Official government documents indicate a plan to acquire at least 15 MGR coaches, two SGR locomotives and 150 SGR locomotive wheelsets in the fiscal year starting July.
“Under transport, the sector will complete construction of the Riruta-Lenana-Ngong Railway Line and fast-track construction Phase I of the Nairobi Railway City (NRC) project, complete the new MGR link connecting Mombasa SGR Terminus to Mombasa MGR station, along with construction of a railway bridge across the Makupa Causeway,” the 2025 budget policy statement notes.
As Treasury removed the funding for the transactions, however, it availed Sh3.59 billion to fund purchase of Meter Gauge Railway (MGR) and SGR locomotives, locomotives wheelsets through separate budget lines, and the start of Naivasha-Malaba SGR line construction.
The Treasury in the second supplementary budget allocated Sh680 million for the purchase of three MGR locomotives and Sh1.1 billion for the purchase of an SGR locomotive.
Purchase of the four locomotives was, however, not in Kenya Railways’ original plans during budgeting for the current fiscal year.
The Treasury also allocated Sh1.08 billion for acquisition of 50 SGR locomotives wheelsets, and Sh709 million for the beginning of SGR Phase 2B and 2C with plans to implement about 10 percent of the project by June.
