NAIROBI, Kenya, Feb 24 – Transport Cabinet Secretary Davis Chirchir has warned that a significant funding shortfall facing the State Department for Transport in the 2026/27 financial year could disrupt implementation of key programmes.
Appearing before the National Assembly of Kenya Committee on Transport, Chirchir said the department has been allocated a ceiling of Sh65.1 billion under the 2026 Budget Policy Statement (BPS), against a proposed requirement of Sh102.7 billion—leaving a deficit of Sh37.7 billion.
Committee members sought clarification on how proposed capital project allocations align with the 2026 BPS resource allocation criteria.
In his presentation, State Department for Transport Principal Secretary Mohamed Daghar assured lawmakers that the department had complied with the project prioritisation and resource allocation framework outlined in the BPS.
He said allocations are aligned with national priorities, including the Bottom-Up Economic Transformation Agenda (BETA) and Kenya Vision 2030.
Priority projects
Key projects include operationalisation of the National Road Safety Action Plan, planning and coordination of the LAPSSET Corridor, development of Berth 1 at the Dongo Kundu Special Economic Zone, and the Nairobi Railway City project.
Daghar said priority has been given to counterpart funding for donor-backed projects under signed financing agreements, including the Horn of Africa Gateway Development Project, rollout of an automated fare collection system, promotion of e-mobility, and modernisation of commuter rail services.
“Hon. Members, additionally, the Department is focusing on near-complete projects to minimise cost overruns and enhance value for money,” he said.
Among projects prioritised are the Nairobi–Nanyuki Meter Gauge Railway, currently at 90 percent completion, and the reconstruction of the Mariakani and Port Reitz Freight Drainage Channel, now at 85 percent completion.
Pending bills and reforms
On pending bills, Daghar disclosed that Sh163.7 million has been earmarked for headquarters operations and maintenance, Sh1.4 billion for the NaMaTA Bus Rapid Transit (BRT) project, and Sh2.6 billion for the Kenya Railways Corporation Mukuru–Kibera Resettlement Action Plan.
He said the department will prioritise settlement of verified pending bills, although the BPS does not cater for claims related to state corporations’ requirements.
Chirchir also told the committee that following operationalisation of the Government Owned Enterprises Act, 2025, the Kenya Ports Authority and Kenya Railways Corporation are undertaking internal reviews to ensure compliance, including governance restructuring, board reconstitution and strengthened financial oversight. Full implementation, however, remains subject to a court injunction.
The CS further revealed that the State Department recently launched a National E-Mobility Policy aimed at promoting green transport and reducing emissions, noting that its rollout will require substantial funding.
Other projects in the pipeline include construction of Berth 19B, Berth 1 at Dongo Kundu SEZ, Standard Gauge Railway Phases 2B and 2C, and modernisation of Motor Vehicle Inspection and Driver Testing Centres.
Despite the operationalisation of the Port of Lamu over the past four years, Chirchir said its full potential remains constrained by inadequate supporting corridor infrastructure. He urged lawmakers to accelerate investment in the LAPSSET Corridor to unlock regional trade and logistics gains.
The committee assured the department of continued support to ensure prudent financial management and efficient use of allocated resources as the 2026/27 budget process progresses.
