Kenya could have saved up to Ksh117 billion on the initial construction of the Mombasa–Nairobi Standard Gauge Railway (SGR) if its cost per kilometre had matched Tanzania’s, according to the World Bank.
The World Bank details these findings in its November 2026 Kenya Economic Update, which examines how governance weaknesses affect public spending, economic growth, and job creation.
“With the same cost metric as the Tanzanian line, Kenya could have saved up to US$900 million in initial construction costs,” the report states.
The World Bank estimates that governance issues, including non-competitive contracting, land speculation, and fraudulent land titles, valuations, and compensation payments, account for at least 30 percent of the potential savings. The report clarifies that this figure represents estimated potential savings rather than definitive proof of stolen or recoverable funds.
The report puts construction costs at US$7.6 million per kilometre for Kenya’s Mombasa–Nairobi railway, compared with US$5.7 million for Tanzania’s Dar es Salaam–Dodoma line and US$5.3 million for the Djibouti–Addis Ababa railway.
Kenya spent about Ksh247 million more per kilometre than Tanzania – a 33 per cent premium over the Tanzanian benchmark, and Ksh299 million more per kilometre than the Djibouti–Addis Ababa line. Applying Tanzania’s rate per kilometre to the Mombasa–Nairobi route shows potential savings of US$900 million, or roughly Ksh116 billion to Ksh117 billion.
The World Bank says governance weaknesses account for at least 30 percent of that estimated potential saving. It cites direct contracting rather than competitive tendering, land speculation, and suspected fraud related to land titling, valuation, and compensation.
The lender warns that limited competition can weaken scrutiny of contract prices and create opportunities for inflated costs.
“Once contracts are awarded to connected companies, this also raises the likelihood of further collusion and cost markups during project execution,” the report states.
The comparison has limits. Kenya’s SGR is diesel-powered, while the Tanzania and Djibouti–Addis Ababa lines are electrified, which requires additional infrastructure. The projects also differ in specifications, construction periods, terrain, and other physical conditions.
All three are single-track railways. The Djibouti–Addis Ababa line was built between 2011 and 2016 and has an elevation gain of about 2,300 metres. Kenya’s Mombasa–Nairobi line was constructed between 2014 and 2017, with an elevation gain of about 1,600 metres. Tanzania’s Dar es Salaam–Dodoma line was built between 2017 and 2024, with an elevation gain of approximately 1,060 metres.
The Ethiopian line therefore crosses more mountainous terrain and has a greater elevation gain than Kenya’s railway. The World Bank also acknowledges that land acquisition costs were significantly higher in Kenya but says they do not fully explain the cost difference. Tanzania’s railway was built later and to a higher specification, including electrification.
The report does not conclude that every additional shilling spent on Kenya’s SGR resulted from corruption. Rather, it identifies governance weaknesses as one explanation for part of the estimated potential savings.
The findings echo Transparency International Kenya’s June 2026 Corruption Risk Assessment of Infrastructure Projects, which examined vulnerabilities in major public investments, including the SGR. The World Bank cites the assessment’s findings on risks involving procurement transparency, public participation, oversight, and access to project information.
The concerns are particularly significant for infrastructure financed through public borrowing, as construction costs affect taxpayers through debt repayments and other fiscal commitments.
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