Kenya Railways MD Philip Mainga Faces EACC, DCI, and ARA Scrutiny Over Fraud Allegations

Philip Mainga, the Managing Director of Kenya Railways Corporation (KRC), finds himself at the center of a legal and investigative storm as allegations of corruption, financial mismanagement, and ethical breaches pile up against him.

The Ethics and Anti-Corruption Commission (EACC), Directorate of Criminal Investigations (DCI), and Assets Recovery Agency (ARA) have been drawn into a high-profile case that could reshape leadership at one of Kenya’s critical state corporations.

The controversy erupted when Matasi Yatundu, a governance advocate, filed a petition at Nairobi’s Milimani High Court, accusing Mainga of violating the Constitution, the Leadership and Integrity Act, and the Public Officer Ethics Act. Justice E.C. Mwita has ordered all parties, including Mainga and the named agencies, to respond within 14 days, setting a hearing date for March 31, 2025.

A Litany of Allegations

Yatundu’s petition paints a damning picture of Mainga’s tenure, alleging massive financial losses at KRC due to irregular procurement practices and a lack of accountability.

One focal point is the Sh150 million tender for murram supply in the Nairobi-Nanyuki railway line rehabilitation (tender no. KR/SCM/FRC/003/2019-2020).

An intelligence report obtained by Kenya Insights reveals the tender bypassed open bidding rules, using restricted tendering despite exceeding the Sh30 million threshold set by the Public Procurement and Disposal Regulations 2020.

Contracts worth Sh88.2 million to First Choice General Suppliers Limited and Sh34.5 million each to Mosrach Limited for Naromuro and Nanyuki stations were backdated, with work starting before formal agreements—a clear breach of procurement law.

Land leasing scandals further complicate Mainga’s position. Whistleblower reports allege he unilaterally leased KRC facilities, such as Makongeni container yards in Nairobi, for 10 years without board approval, costing the corporation over Sh400 million in lost revenue.

Similar irregularities are cited in the Nairobi Railway City and SGR station areas, where leasing proceeded despite ongoing development plans.

A notable case involves the Athi River Logistics Hub, where Grain Bulk Handling Limited (GBHL), linked to Mombasa tycoon Mohamed Jaffer, allegedly encroached on 62 acres instead of the allocated 50, blocking an SGR access road.

Internationally, KRC under Mainga is accused of misleading foreign investors with unfulfilled land development promises, sparking legal disputes. A legal notice from a senior Qatar Chamber of Commerce member highlights one such broken commitment, adding to Kenya’s reputational and financial burdens abroad.

Financial Fallout

The financial stakes are staggering. A Treasury report lists KRC as the top loss-making state entity, bleeding Sh33.5 billion in the year ended June 2023. An audit by Auditor General Nancy Gathungu for 2022 revealed KRC defaulted on a loan from Exim Bank, incurring Sh644 million in penalties and accruing Sh50.9 billion in charges—costs ultimately borne by taxpayers.

These figures echo broader concerns raised by the Institute of Economic Affairs (IEA), which estimates procurement fraud costs Kenya enough to bridge its Sh862.5 billion fiscal deficit.

Whistleblower Claims and Term Extension Controversy

Adding fuel to the fire, a whistleblower report addressed to the EACC demands Mainga’s removal, alleging his 2023 term extension—securing his role until 2026—was corruptly obtained through bribes to then-Transport Cabinet Secretary Kipchumba Murkomen and the KRC board.

The extension, quietly approved before the 2022 election, is still under investigation by the Public Service Commission (PSC) but we’re told he oiled those involved in the investigations to look away.

The whistleblower, claiming insider knowledge, accuses Mainga of past success in compromising EACC probes, though hopes are pinned on renewed accountability efforts following Gen Z protests.

Mainga’s Tenure in Context

Mainga assumed the MD role in February 2019, following the suspension of his predecessor, Atanas Maina, over corruption allegations.

With over two decades in railway operations and advanced degrees in Project Planning and Economics, Mainga was seen as a steady hand to steer KRC, which manages critical infrastructure like the Standard Gauge Railway (SGR).

Yet, his leadership has coincided with mounting losses and scandals, raising questions about his suitability.