Kenya lifts cost estimate for Naivasha-Kisumu railway extension by nearly 30%

Kenya’s National Treasury has raised the projected cost of extending the standard gauge railway from Naivasha to Kisumu and onward to the Ugandan border to KES651 billion, a rise of 29.4% from the KES502.9 billion estimate released a year earlier. About 95% of the new total, KES618.8 billion, is slated to come from external financing, yet the government has not identified concrete commitments covering the full amount. A July report indicated a construction contract with China Communications Construction Company and its subsidiary valued at KES700 billion, which is roughly KES49 billion higher than the Treasury’s revised cost, without clarification on scope differences.

The project’s length is variously reported as 369 km, 371 km, and includes an 8.69-km branch to a proposed Kisumu Port, reflecting inconsistencies in alignment data. While President William Ruto inaugurated the Naivasha-Kisumu segment and President Yoweri Museveni the Kisumu-Malaba segment, on-ground progress remains uneven, with land acquisition for over 5,000 acres still pending and compensation disputes in several counties. Financing plans involve revenue securitisation of the Railway Development Levy and potential bond issuance, but the relationship between these mechanisms and the external financing requirement is unclear.