Government Approves Division of Kenya Railways into Three Entities

January 16, 2024

In a move to enhance efficiency and regional competitiveness, the Cabinet approved the Railway Amendment Bill 2024 on Monday, setting the stage for a significant overhaul of Kenya Railways.

The proposed change aims to divide the organization into three distinct entities: freight, commuter, and land development.

President William Ruto, who presided over the Cabinet meeting, said this restructuring will strengthen Kenya as a regional logistics hub.

“To strengthen Kenya as a regional logistics hub, the Cabinet approved the Railway Amendment Bill 2024, which aims to introduce new methods of managing railways and segregating the business of freight, commuter, and land development,” a statement read in part.

The new approach also aims to unlock efficiencies by delineating responsibilities and potentially attracting private investment.

The substantial amount of underutilized land owned by Kenya Railways is a significant driver behind the split.

The Cabinet intends to capitalize on this resource by creating railway cities along existing railway lines, starting with the ongoing Nairobi Railway City project.

The initial phase, with a cost of Sh12 billion, was initiated in February 2023 and envisions a multimodal, transit-oriented urban development centered around a new Nairobi Central Railway Station.

The Cabinet envisions extending this model to other major cities and towns along the railway network, including Mombasa, Athi River, Naivasha, and Kisumu.

The Bill proposes a distinctive approach to managing these railway cities. Instead of direct government control, Kenya Railways would function as a regulator, enabling private investors and even county governments to take the lead in development.

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