Kenya Railways Tender Scandal Exposes Massive Conflict of Interest
A procurement scandal has rocked Kenya Railways, with revelations of a deliberate conflict of interest in a KSh 200 million tender for supplying office stationery. The tender, numbered KR/SCM/FRC/003/2023-2024, covered Kenya Railways Headquarters, the Railway Training Institute, and the Standard Gauge Railway operations.
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Internal sources allege the tender was irregularly awarded to proxy companies linked to senior management, bypassing legal procurement processes. These actions allegedly contravened the Public Procurement and Asset Disposal Act, 2015, specifically Section 62, which emphasizes corruption prevention, and the Competition Act, 2010, which prohibits collusive practices in contracting.
Suppliers Raise Alarm
Disgruntled suppliers have accused Kenya Railways management of conducting a predetermined award process, claiming they were misled into participating in what they describe as a rigged process.
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“In their own tender documents, they highlighted the importance of avoiding unfair competitive advantage, yet the award process blatantly ignored transparency and fairness,” said one supplier, who called for investigative agencies to hold the perpetrators accountable.
The whistleblower further accused management of disregarding the corporation’s own procurement guidelines, pointing to a systemic failure to uphold ethical practices.

Treasury’s Warning on Mismanagement
The scandal comes amid heightened scrutiny of state corporations by the Treasury, with Cabinet Secretary John Mbadi issuing stern warnings against financial misconduct. Mbadi recently highlighted a trend where parastatals divert operating surpluses into unauthorized capital projects, such as acquiring land, buildings, and machinery, instead of remitting 90% of the surplus to the government as required by the Public Finance Management Act.
“No State corporation should provide for capital expenditure from operating surplus without written approval from the National Treasury,” Mbadi stated in a circular.
This directive follows concerns that some agencies, including Kenya Railways, the Kenya Ports Authority, and the Communications Authority of Kenya, have been exploiting surpluses to circumvent proper budgetary oversight.
Revenue Gains Amid Reforms
The Treasury’s crackdown on surplus mismanagement has already begun to yield results. In the quarter ending September, non-tax revenue surged to KSh 65.32 billion, nearly tripling from KSh 23.08 billion during the same period last year. This increase is attributed to stricter enforcement of financial management rules.
Call for Accountability
The Kenya Railways tender scandal has drawn widespread calls for accountability. Observers argue that the mismanagement undermines public trust and deprives the government of critical resources for national development.

Investigative agencies are now being urged to step in and scrutinize the tendering process at Kenya Railways, with a focus on holding those responsible to account.
This case serves as a stark reminder of the urgent need for reforms in procurement and financial oversight across state corporations.