After years of operating without making a profit, Kenya’s Standard Gauge Railway (SGR) has finally crossed into positive territory, posting an operating profit of Ksh 3.2 billion in the 2025/26 financial year.
The milestone comes nine years after the railway began operations in 2017 and marks a major turnaround for a project whose financial performance has faced scrutiny because of its high construction and operating costs.
The latest results were largely driven by the growing volume of cargo being moved by rail from the Port of Mombasa to inland destinations. Kenya Railways Corporation Managing Director Philip Mainga said the railway’s performance improved after several measures were introduced to increase freight business and improve operations.
During the financial year, the SGR moved a record 8.2 million tonnes of cargo, compared with 7.04 million tonnes in the previous year. Freight operations generated about Sh21.8 billion in revenue, making cargo transport the railway’s biggest source of income.
Mainga linked the improvement to better cargo evacuation at the Port of Mombasa, increased freight train operations and efforts to improve the experience of customers using rail services.
“We have seen significant growth in freight volumes due to interventions that have improved operations and increased the movement of cargo,” Mainga said.
The stronger performance also comes after Kenya Railways took over the full operation of the SGR from Chinese operator Afristar. The railway was initially operated under an agreement with the Chinese company following its construction.
The Mombasa-Nairobi line was opened in 2017, while the railway was later extended from Nairobi to Naivasha. Together, the two sections required hundreds of billions of shillings to construct.
Passenger services have also continued to support the railway’s growing revenue. Official figures from the Kenya National Bureau of Statistics show that 2.73 million passengers travelled on the SGR in 2025, up from 2.44 million in 2024. Passenger revenue also increased to Ksh 4.79 billion from Ksh 4.1 billion.
The increase was partly supported by additional trains deployed during busy travel periods, especially during the December holidays when demand for trips between Nairobi and Mombasa rises.
Freight, however, remains the backbone of the SGR business. The railway provides a direct connection between the Port of Mombasa and inland container depots, helping move imported and exported goods away from the busy roads linking the coast to Nairobi and other parts of the country.
The Ksh 3.2 billion operating profit does not mean that all the financial obligations associated with the SGR have been cleared. However, the latest results show that the railway is moving closer to becoming a financially sustainable transport operation.
For Kenya Railways, maintaining the growth in cargo volumes while attracting more passengers will be key to building on the latest performance and strengthening the SGR’s role in the country’s transport network.
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