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Kenya Railways Corporation (KRC) has been embroiled in a series of financial and operational crises, with its Managing Director, Philip Mainga, at the center of several corruption allegations.
Under his leadership, the corporation has seen staggering losses, turning it into a massive burden on Kenyan taxpayers.
A recent report by Whistleblower within the Kenya Railways circle and investigative probes paint a damning picture of the mismanagement and questionable dealings that have left the once promising parastatal teetering on the brink of collapse.
Mainga, who officially took over as KRC’s substantive Managing Director in January 2020, had previously served in an acting capacity following the suspension of his predecessor, Atanas Maina, over corruption allegations.
However, the hope for a fresh start under Mainga has been shattered, with his tenure now mired in scandal.
A Shady Contract and Daily Losses
One of the key accusations against Mainga involves a flawed deal with Africa Star Railways (Afristar), the Chinese company contracted to operate the Standard Gauge Railway (SGR).
This contract, which was signed during Atanas Maina’s tenure but allegedly initiated by Mainga, has been a major source of financial hemorrhaging for Kenya Railways. The whistleblower report claims that due to the unchecked execution of this deal, Kenya Railways was losing up to KSh 1.4 million daily.
This agreement was intended to streamline the operation of the SGR, Kenya’s largest infrastructure project in decades, but it instead became a source of massive financial losses.
Despite the project’s initial promise of turning a profit and easing Kenya’s logistics challenges, the SGR has been anything but financially viable.
Abuse of Office and Unauthorized Leases
The whistleblower report further accuses Mainga of gross abuse of office.
In March 2019, while serving as the acting MD, he is alleged to have unilaterally leased KRC’s container yards and buildings at Makongeni, Nairobi, for a period of ten years.
This was done without following the proper internal procedures or obtaining board approval.
According to the report, this move was highly irregular, as the Kenya Ports Authority (KPA) had taken over the property in October 2018 without formal handover.
KRC was reportedly earning KSh 23 million monthly from these facilities before the unauthorized lease. To date, Kenya Railways has allegedly lost over KSh 400 million in storage and container transport charges due to this decision.
Additionally, Mainga is said to have played a role in facilitating Kenya Ports Authority’s decision to uplift the railway lines in favor of road transport, a move that has been described as a scheme designed to benefit specific transporters.
This has resulted in further financial losses for Kenya Railways, as the corporation would now have to incur additional costs to reinstate the railway line to its original use.
The whistleblower report also details numerous instances where Mainga allegedly leased Kenya Railways land without the requisite approvals.
In one case, he reportedly leased five acres of land in Thika to Harvest International for a period of 15 years without consulting the relevant departments or considering how this might conflict with current or future railway operations.
Similarly, Mainga is accused of leasing Kenya Railways land along Bunyala Road in Nairobi to Taff International, again without the necessary board approval.
Lack of Transparency and Corrupt Leasing Practices
Transparency and fairness in leasing processes have been major concerns during Mainga’s tenure. The whistleblower report highlights instances where Kenya Railways land was subdivided and leased without any demonstration of transparency in the identification of lessees.
For example, Mainga is said to have subdivided 22 plots of land in Nakuru and leased them to unidentified companies without providing any clarity on how these entities were chosen.
A similar case involves the subdivision of land at the Sleeper Press in Nairobi, where Mainga presented a lease for eight plots to the board for approval. Once again, no clear process for the transparent identification of lessees was provided.
These actions have raised red flags about the possibility of corrupt dealings, with critics accusing Mainga of engaging in underhanded practices that have compromised Kenya Railways’ ability to function as a transparent and accountable institution.
Leases related to Kenya Railways land acquired for the SGR project have also been called into question. Mainga reportedly leased land near the Nairobi and Syokimau SGR stations to select companies without demonstrating that the process was fair and transparent.
This has further fueled suspicions of corruption, with the whistleblower report claiming that Mainga’s actions have enriched a few well-connected individuals at the expense of taxpayers.
Questionable Tenders and Mismanagement of Railway Rehabilitation Projects
Procurement fraud and mismanagement of rehabilitation projects have also been rife under Mainga’s leadership. One of the most glaring examples is the Sh150 million tender for the supply of murram for the rehabilitation of the Nairobi-Nanyuki railway line.
According to the whistleblower report, the tendering process was marred by irregularities, including the use of restricted tendering despite the project’s total budget far exceeding the threshold for such a process.
First Choice General Suppliers Limited, the company that was awarded the tender, is said to have signed a contract that was backdated to cover work already completed.
Similar irregularities were observed in tenders for the rehabilitation of other railway stations, including Naromuro, Nanyuki, Mitubiri, Makuyu, and Kiganjo.
In all these cases, contracts were signed after work had already begun, raising serious questions about the integrity of the tendering process and whether these projects were conducted in accordance with public procurement laws.
Financial Bleeding and Calls for Mainga’s Ouster
Under Mainga’s stewardship, Kenya Railways has been listed among the top state corporations bleeding taxpayers’ money. A Treasury report revealed that in the year ending June 2023, Kenya Railways recorded losses amounting to KSh 33.5 billion, making it one of the most financially troubled state entities in Kenya.
The whistleblower’s report, which has been submitted to the Ethics and Anti-Corruption Commission (EACC), alleges that Mainga’s stay in office is illegal, as his term was corruptly extended.
There are claims that Mainga bribed key figures, including former Transport Cabinet Secretary Kipchumba Murkomen, to secure the extension of his term.
Critics argue that Mainga’s continued leadership is untenable, as it not only perpetuates corruption but also hampers any efforts to restore financial order within the corporation.
