Four Traders Blocked From Building Inland Nairobi SGR Depot As MD Mainga Fingered in The Scandal

Four Nairobi businessmen have been dealt a major blow in their attempt to halt the construction of a multi-million shilling inland container depot for the Standard Gauge Railway in Syokimau, Embakasi, even as fresh corruption allegations emerge against Kenya Railways Managing Director Philip Mainga.

John Mugo Njeru, Byron Kanyu, John Muswanyi and Victor Muiru approached the court seeking an injunction to stop Syokimau ICD Limited from developing the 15-acre parcel, claiming they are the registered owners of the land. The businessmen said the property was part of a 37-acre tract allocated to them in July 1998, for which they processed and registered title deeds in February 2005.

However, Justice Erick Obaga dismissed their application, ruling that Syokimau ICD Limited was lawfully in possession of the land based on a 15-year lease agreement with Kenya Railways Corporation effective from November 29, 2018. The judge noted that the land had been compulsorily acquired by the government in 1971, raising questions about how it could have been available for fresh allocation nearly three decades later in 1998.

“The question which will have to be interrogated later on is whether the land which had been subject of compulsory acquisition in 1971 could again be available for fresh allocation in 1998,” Justice Obaga observed, adding that the applicants failed to demonstrate they have a case with probability of success.

The ruling comes amid explosive allegations against Kenya Railways MD Philip Mainga, who has been accused in a whistleblower report to the Ethics and Anti-Corruption Commission of orchestrating a series of irregular land deals and lease agreements that have cost the parastatal hundreds of millions of shillings.

According to the report, Mainga is alleged to have unilaterally leased Kenya Railways facilities at Makongeni, Nairobi, for ten years on March 21, 2019, without following internal procedures or obtaining board approval. The property had already been taken over by Kenya Ports Authority in October 2018 and was generating 23 million shillings monthly for Kenya Railways. The corporation has since lost over 400 million shillings in container transport and storage charges.

The whistleblower claims that as a result of this action, KPA uplifted railway lines without authority and resorted to road transport, allegedly part of a corruption scheme designed to benefit specific road transporters. Kenya Railways will now have to incur additional costs to reinstate the line.

Mainga is also accused of misrepresenting board decisions in multiple lease agreements. Through a letter dated September 14, 2018, he allegedly indicated that the board approved a lease of Kenya Railways reserve land along Bunyala Road to Taff International, yet none of the seven leases approved by the board on that date related to Taff International.

Similarly, in a letter dated October 2, 2018, Mainga allegedly claimed the board recommended leasing five acres in Thika to Harvest International for 15 years, when this lease was not part of those approved during the board meeting. The whistleblower notes that Mainga failed to check whether leasing land in an operational zone would conflict with current or future railway operations.

On July 10, 2019, Mainga allegedly wrote letters indicating that the board recommended leasing land to Kokotoni Investments Limited and Mapset Maritime Limited for 30 years, knowing fully that the board had not approved these leases.

The report also accuses Mainga of evicting Kristaline Salt Limited from a Kenya Railways godown in Malaba on March 22, 2018, without reasonable cause, confiscating their goods and leasing the property to Multiple Solutions Limited, a tenant of his choice. The corporation now faces a claim of 10,315.50 US dollars and 395,400 shillings, plus general damages and legal costs.

Mainga is further accused of lacking transparency in land subdivision and leasing processes. He allegedly subdivided Siwani Estate in Nakuru into 22 plots and presented leases for exactly 22 plots to the board without demonstrating how the lessees were transparently identified. A similar pattern occurred with the Sleeper Press land in Nairobi, which was subdivided into eight plots with eight corresponding leases presented for approval.

The whistleblower report claims Mainga disregarded proper planning procedures, particularly in the leasing of the Athi River logistics hub. He allegedly allowed Grain Bulk Handling Limited, associated with Mombasa tycoon Mohamed Jaffer, to take over the proposed Kenya Railways Athi River Logistics Hub before physical planning was undertaken. GBHL ended up blocking what would have been an access road to Athi River SGR station and acquired 62 acres instead of the allocated 50 acres, forcing planners to work around their development.

Mainga also allegedly recommended leasing and extension of leases within Nairobi Railway City despite knowing there was an ongoing master plan development by Kenya Railways and Nairobi County Government. Over 100 acres around the SGR Nairobi Station area, Syokimau Station and adjoining areas were reportedly leased while development plans were being undertaken by Kenya Railways, the Ministry of Lands, and the county governments of Nairobi and Machakos.

The MD is also fingered in a flawed deal with Africa Star Railways, the Chinese operator for the SGR line, which saw Kenya Railways lose up to 1.4 million shillings daily. The contract was signed during former MD Athanas Maina’s tenure but was initiated by Mainga himself.

These revelations cast a shadow over the ongoing development of SGR infrastructure, raising serious questions about governance and accountability at Kenya Railways. The EACC is yet to comment on the allegations or indicate whether investigations have been launched into the matter.