SGR Extension, Electric Trains, and 500 New Wagons: Govt Sets Aside Ksh40 Billion for Railways Overhaul
The government has set aside Ksh40.25 billion for railway development in the 2026/27 budget, aiming to modernize the country’s rail transport system. The funding places rail infrastructure at the center of the government’s broader strategy to improve mobility, boost trade, and strengthen regional connectivity.
As part of this allocation, Kenya Railways will receive Ksh616 million to begin procuring high-capacity passenger coaches and freight wagons. The move supports ongoing work on the 369-kilometer Standard Gauge Railway (SGR) extension from Naivasha to Kisumu and Malaba, a key corridor expected to handle rising passenger and cargo demand across East Africa.
To expand capacity and improve efficiency, the government plans to acquire 500 SGR flat wagons and 20 modern passenger coaches. These additions will accelerate cargo movement while offering commuters a more comfortable and reliable travel experience.
The railway upgrades form part of a wider Ksh51.78 billion transport sector investment aimed at transforming how people and goods move across the country.
Authorities are also focusing on maintaining existing infrastructure to ensure consistent performance. The government has allocated Ksh2.76 billion for SGR locomotive wheelsets, targeting reduced downtime and improved service reliability. When combined with other rolling stock investments, total spending on these critical components rises to Ksh3.36 billion.
In a parallel effort to modernize passenger services, the state has set aside Ksh450 million to roll out a digital ticketing system. This upgrade will streamline booking processes, reduce congestion at stations, and deliver a more seamless travel experience.
The initiative comes as Kenya Railways accelerates the rollout of new economy-class coaches, responding to widespread complaints about aging carriages.
The corporation has already introduced upgraded coaches featuring redesigned interiors and more ergonomic seating. These improvements aim to elevate comfort levels, particularly for budget-conscious travelers who rely heavily on economy services.
While officials have yet to confirm a timeline for a full fleet replacement, the gradual rollout signals a steady transition toward a modern passenger experience.
Looking beyond immediate upgrades, the government is exploring a more advanced future for the SGR network. It has opened discussions with Turkish construction company Yapı Merkezi on electrifying the railway line from Mombasa to Malaba. If implemented, the shift from diesel to electric trains would increase speed, reduce operational costs, and improve environmental sustainability along Kenya’s busiest transport corridor.
Yapı Merkezi Vice Chairman Erdem Arıoğlu confirmed the firm’s interest in developing a modern electric rail system designed to enhance efficiency and drive cross-border trade. The proposed electrification aligns with a broader regional vision, linking Kenya’s railway network to a Ksh413 billion rail project currently underway in Uganda.
This cross-border integration is expected to transform East Africa’s logistics landscape, enabling smoother movement of goods and passengers while strengthening economic ties between neighboring countries.
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