Kenya could have saved up to $900 million, about KSh116 billion to KSh117 billion, on building the Mombasa-Nairobi Standard Gauge Railway (SGR), Nairobi Wire reported. The World Bank says the saving would have been possible had Kenya matched Tanzania's cost per kilometre. The finding appears in the lender's November 2026 Kenya Economic Update. The report examines how weak governance affects public spending, growth and jobs.
The SGR cost $7.6 million per kilometre, according to the report. Tanzania's Dar es Salaam-Dodoma line cost $5.7 million per kilometre, and the Djibouti-Addis Ababa railway cost $5.3 million. Kenya therefore paid about KSh247 million more per kilometre than Tanzania, a 33% premium. Against the Djibouti-Addis Ababa line, the gap was KSh299 million per kilometre.
The World Bank says governance problems account for at least 30% of the potential saving. It points to direct contracting instead of competitive tendering, land speculation, and suspected fraud in land titles, valuations and compensation. The lender warns that weak competition reduces scrutiny of contract prices. "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 report stresses that the figure is an estimate of potential savings. It is not proof of stolen or recoverable money. Nor does the World Bank conclude that every extra shilling spent on the SGR came from corruption.
The bank acknowledges that the comparison has limits. Kenya's SGR runs on diesel. The Tanzanian and Djibouti-Addis Ababa lines are electrified, which requires extra infrastructure. The projects also differ in specifications, construction periods and terrain. All three are single-track railways.
Kenya built its line between 2014 and 2017, with an elevation gain of about 1,600 metres. The Djibouti-Addis Ababa line was built between 2011 and 2016 and climbs about 2,300 metres. Tanzania's line was built between 2017 and 2024 to a higher specification, with an elevation gain of about 1,060 metres. The World Bank says Kenya's land acquisition costs were much higher, but they do not fully explain the gap.
The findings echo Transparency International Kenya's June 2026 Corruption Risk Assessment of Infrastructure Projects, which also examined the SGR. The World Bank cites its findings on risks in procurement transparency, public participation, oversight and access to project information.