Publish all your financial records, lawmakers tell SGR

MPs now want the Kenya Railways Corporation (KRC) to publish details of revenue collections, operational costs and sources of any financial support for the Standard Gauge Railway (SGR) following concerns that the entity is making losses.

The details, which should include quarterly financial reports, should be published on the corporation’s website to enhance transparency and accountability.

“The Committee recommends that the Kenya Railways Corporation publishes the quarterly financial reports of the Standard Gauge Railway (SGR) on its official website detailing a breakdown of revenue. collections operational costs and sources and the amount of any financial support, to enhance transparency and accountability,” the report by a National Assembly committee reads.

 The MPs have also directed KRC to take over all the operations and maintenance of the SGR by December 2025 in order to reduce operational costs.

 According to the report tabled in the National Assembly, the MPs who sit in the public Petitions Committee, chaired by Nimrod Mbai, warned that the operational costs could go higher if the handover is not done as stipulated in the agreement, which was amended to allow phased takeover/hand back of SGR functions.

Currently, there are 52 SGR and Operations and Maintenance functions in total, 46 of the total area under Kenya Railway (KR). Only six functions are under Africa Star Railway Operation Company (Afristar), which has been operating and maintaining the SGR since its inception in May 2017. These six functions are meant to ensure safe and seamless continuity of operations and completion of the skills transfer in the safety-critical areas in the SGR.

One of the functions, Railway Signal System O&M, is to be taken over by December 31 this year, while the remaining five (Passenger Train Operation, Freight Train Operation, Dispatch Centre Service, Train Marshalling and Organisation Service) at the Nairobi Terminus and Port Reitz Station in Mombasa will be taken over by the end of 2025.

Breaking even

The committee’s directive comes after the MPs learnt that over time, the project’s financial position has deteriorated, resulting in an accumulation of pending bills that were frequently paid through mid-year budget reviews, and the project’s operating costs always outpaced its revenues.

 For instance, currently, the total amount owed to Afristar SGR is $63,847,752 (Sh8.2 billion) annually, or $5,320,646 (Sh686.36 million) monthly, and the same could go higher if the total handover of the company’s functions to KRC is not completed.

The committee further regretted that so far, the project has failed to break even as the total revenues generated from the 2017/2018 through to the 2022/2073 financial year was Sh73 billion against total operational expenses of Sh100.7 billion.

Regarding the project’s feasibility and viability based on its performance since commencement, the report notes that the operating deficit has steadily reduced from Sh10.5 billion in the financial year 2017/2018 to Sh1.869 billion in 2021/2022. This was followed by a surplus of Sh159 million in the financial year 2022/2023 in container hauling.

The report wants KRC to put appropriate measures in place to ensure it takes over the remaining functions of operations and maintenance of the SGR by December 2025, with a view to reducing operational costs.

Pensions payment

The MPs also want KRC to invest in the development of the technical employees’ professional capacity to ensure that the subsequent phases of the project are finalized. This is in line with the Medium-Term Plan lV of The Vision 2030 and diversifies its services by offering loyalty programmes and special packages for various groups such as students, senior citizens, and frequent travellers.

Meanwhile, the MPs have also directed the corporation to fast-track payment of pending pension owed to its former employees, following a suit filed by Benson Mocheo who claims that despite working for the corporation over a period of 17 years, between January 8, 1968 and April 30, 1985, as a station manager on permanent and pensionable terms, he is yet to be paid his pension dues.

The committee directed the corporation to initiate administrative procedures to identify and deal with any negligence or fault by the officers responsible for processing the pension.

“The Committee recommends that the Kenya Railways Corporation promptly and adequately pays the pension owed to Mocheo for his seventeen (17) years of service within thirty (30) days of the report being tabled,” the report lays out.