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Gov't approves split of Kenya Railways into 3 entities [Details]

The new approach seeks to unlock efficiencies by separating responsibilities and potentially attracting private investors

Kenya Railways passenger train

In a bid to boost efficiency and regional competitiveness, the Kenyan Cabinet on Monday approved the Railway Amendment Bill 2024, setting the stage for a major overhaul of Kenya Railways.

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

President William Ruto, who chaired the Cabinet meeting, believes this restructuring will fortify Kenya as a regional logistics hub, according to the official dispatch.

The new approach also seeks to unlock efficiencies by separating responsibilities and potentially attracting private investment.

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"To fortify Kenya as a regional logistics hub, the Cabinet approved the Railway Amendment Bill 2024 that aims at initiating new ways of running railways and separating the business of freight, commuter and land development," the despatch read in part.

One key driver of the split is the vast amount of underutilized land currently owned by Kenya Railways.

The Cabinet aims to leverage this resource by establishing railway cities along existing railway lines, starting with the ongoing Nairobi Railway City project.

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This first phase, with a price tag of Sh12 billion, was launched in February 2023 and envisions a multimodal, transit-oriented urban development centered around a new Nairobi Central Railway Station.

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

However, handing over substantial tracts of prime land to private entities raises concerns about potential land grabbing, especially considering the 425 acres already earmarked for the Nairobi project within the city's central business district.

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

This model holds promise for attracting fresh capital and expertise but raises questions about transparency and accountability in land management.

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