Auditor flags Sh2bn spent on trains


Auditor-General Nancy Gathungu. FILE PHOTO | NMG

The National Treasury is on the spot for irregularly diverting Sh2 billion from the Railways Development Levy Fund for the purchase of locomotives to run the meter gauge railway (MGR).

The Auditor General says in her latest report that the Treasury, then headed by Ukur Yatani, released Sh2.09 billion out of Sh26.84 billion that the fund had accumulated in the year to June 2022.

The Sh2 billion that went towards the purchase of MGR locomotives was by law meant to provide funds for the construction and operation of the standard gauge railway (SGR).

“The payments were irregular since Section 8 (3) of the Miscellaneous Fees and Levies Act, 2010 provides that the purpose of the Railway Development Levy shall be to provide funds for construction and operation of the standard gauge railway (SGR) network in order to facilitate transportation of goods,” Ms Nancy Gathungu, the Auditor General says in the latest report.

In an audit of the State Department for Transport for the year to June 2022, Ms Gathungu said no justification was provided for the irregular utilisation of the funds.

“In the circumstances, the irregularity of the expenditure of Sh2,099,848,494 on the purchase of MGR locomotives could not be confirmed,” she said in a qualified audit opinion tabled in Parliament.

Kenya Railways in February 2022 purchased seven passenger locomotives that are being used between Nairobi and Kisumu following the upgrade of the MGR.

The State corporations intended to increase passenger and cargo frequencies to three on the Nairobi-Kisumu route and extend commuter services to Butere.

At the time, the Kenya Railways management did not reveal the costs of the trains, which were procured from China.

Ms Gathungu’s revelation that Sh2.09 billion was spent to purchase the MGR locomotives means that taxpayers spent about Sh300 million to purchase each of the seven trains.

The locomotives were procured following the rehabilitation of the metre gauge railway that has seen Kenya Railways introduce trains to Kisumu once weekly.

Kenya railways regional manager for Kisumu Michael Disi last year said there has been an increase in demand for passengers on the route, hence the need to increase the frequencies.

He said an increase in frequencies on the route will be convenient to passengers as they can now plan their trips accordingly as opposed to the single train that plies the route on Friday from Nairobi.

The Kisumu Railway Station was constructed after the government reclaimed land from artisans and fishmongers.

The small traders were to be moved to the 17-acre Uhuru Business Park market after the complex is commissioned.

The government has also extended the Kisumu-Butere route in a bid to cash in on passengers travelling to regions like Mumias.

The upgrade of the railway and port transport is expected to benefit and expand other sectors of the economy such as tourism in the western circuit.

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