A new World Bank report has estimated that Kenya could have saved approximately KSh116 billion (US$900 million) during the initial construction of the Standard Gauge Railway (SGR) between Mombasa and Nairobi if the project had been built at a cost comparable to Tanzania’s railway.
The comparison, contained in the World Bank’s Kenya Economic Update released on Wednesday, November 4, 2026, raises questions about the cost of major infrastructure projects and the role of governance in public spending.
According to the report, Kenya spent approximately KSh988 million (US$7.6 million) per kilometre on the Mombasa–Nairobi SGR. This was significantly higher than the costs recorded for comparable railway projects in Tanzania and Djibouti.
Kenya’s SGR Construction Cost Compared to Tanzania and Djibouti
The World Bank compared the construction costs of three major railway projects in East Africa, finding that Kenya’s SGR had the highest cost per kilometre.
The report gave the following figures:
| Railway project | Construction cost per kilometre |
|---|---|
| Kenya: Mombasa–Nairobi SGR | KSh988 million |
| Tanzania: Dar es Salaam–Dodoma railway | KSh741 million |
| Djibouti–Addis Ababa railway | KSh689 million |
Based on Tanzania’s construction cost, Kenya could have saved up to KSh116 billion on the initial railway construction.
The lender attributed at least 30 per cent of the potential savings to governance challenges, rather than differences in terrain or technical requirements.
“With the same cost metric as the Tanzanian line, Kenya could have saved up to US$900 million in initial construction costs. Of this amount, at least 30 percent is considered attributable to governance challenges,” the report noted.
World Bank Identifies Procurement and Land Compensation Irregularities
The report identified several governance weaknesses that contributed to higher infrastructure costs in Kenya.
These included the preference for direct contracting instead of competitive tendering, land speculation and alleged fraud involving land ownership documents, property valuations and compensation payments.
The World Bank also referenced a 2026 Transparency International Kenya assessment, which applied the Infrastructure Corruption Risk Assessment Tool (ICRAT) and identified the SGR project as particularly vulnerable to corruption risks.
According to the National Treasury’s draft 2027 Budget Policy Statement released in October 2026, Kenya borrowed approximately KSh648 billion (US$5 billion) from China to finance the construction of the railway from Mombasa towards Naivasha.
World Bank Raises Concerns Over Government Contracts Awarded to Connected Companies
Beyond the SGR, the international lender warned that public procurement in Kenya faces governance challenges involving companies linked to government officials.
The report observed that some government agencies favour direct procurement over competitive tendering, while certain Public-Private Partnership (PPP) projects originate from unsolicited proposals without adequate transparency.
“Once contracts are awarded to connected companies, this also raises the likelihood of further collusion and cost markups during project execution,” the report stated.
The World Bank warned that such arrangements can inflate project costs and increase pressure on public finances.
It also identified power purchase agreements (PPAs) between Kenya Power and independent power producers as requiring closer scrutiny.
A 2021 assessment by the Energy and Environmental Development Advisory and the Energy for Growth Hub found that only 24 per cent of 42 PPAs signed by Kenya Power were known to have undergone competitive procurement.
The lender called for greater transparency in electricity procurement, public contracts and beneficial ownership records to establish the individuals who ultimately own companies awarded government contracts.
World Bank Warns Boda Boda Riders and Informal Workers Lose Earnings to Bribes
The World Bank also raised concerns about corruption at the grassroots level, warning that informal workers regularly face demands for bribes from traffic police, county inspectors and other frontline government officers.
According to the report, informal workers could lose up to 20 per cent of their daily earnings through unofficial payments.
Boda boda riders were particularly affected, with estimates showing that they spend between 5 and 20 per cent of their daily earnings on bribes, translating to approximately KSh50 to KSh100 per day.
The report further cited estimates suggesting that payments made to traffic police across the country amount to approximately KSh88 billion annually.
The findings point to the financial burden faced by small-scale traders and transport operators who frequently interact with enforcement officers while conducting their daily business.
World Bank Proposes Reforms to Curb Police Bribery
To address bribery targeting informal workers, the World Bank recommended fully implementing reforms aimed at decriminalising minor traffic offences.
The lender also proposed introducing an instant fines system to reduce the discretion exercised by enforcement officers.
Under the proposed approach, some minor traffic offences would attract predictable financial penalties instead of criminal enforcement procedures, potentially reducing opportunities for officers to demand unofficial payments.
The World Bank further urged national and county governments to agree on measures to protect informal workers from harassment by government inspectors.
The recommendations form part of broader calls for improvements in public procurement, infrastructure spending and accountability in government institutions.
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