Kenya Railways is once again at the centre of a long-running pension crisis, but this time the corporation says it has a concrete plan that could finally ease the suffering of its retired workers.
After years of complaints, delayed payments and pressure from Parliament, the corporation is preparing to sell several high-value Nairobi properties to raise money for long-overdue pension settlements.
The Kenya Railways Staff Retirement Benefits Scheme has struggled with liquidity problems for years, leaving pensioners in a cycle of uncertainty.
Many of them have repeatedly told lawmakers that they cannot afford basic needs, medical care or rent because the scheme does not pay them on time.
Others have died while still waiting for their dues. The crisis has turned what should have been peaceful retirement years into a battle for survival.
This week, the corporation told senators that a breakthrough is within reach. Managing director Philip Mainga explained that Kenya Railways expects Ksh 2 billion from the Kenya National Highways Authority for land sold earlier, money that will allow it to clear most of the Ksh 2.26 billion currently owed to retirees.
“We are waiting for KENHA to pay us for a parcel of land we sold to them, it’s about Ksh 2 billion that will enable us to clear the balances and going forward, we are looking at other prime parcels like Makongeni Estate and Ngara to plan for future repayments,” Mainga said during a session with the Senate Committee on Labour and Social Welfare.
According to him, the corporation has already drafted a payment plan stretching to January 2026. But because the scheme needs stable, long-term funding, Kenya Railways intends to sell more assets.
Makongeni Estate, valued at about Ksh 8 billion, and Ngara Estate, estimated to fetch between Ksh 8 billion and Ksh 10 billion, have been identified as the next properties that could be put on the market. Officials believe disposing of these assets will help stabilise the pension fund and prevent future delays.
The corporation’s financial difficulties date back to 2006, when the retirement scheme was formed after restructuring. It inherited more than Ksh 16 billion in liabilities, including pension arrears and unremitted contributions from the defunct corporation. Since then, efforts to sell or transfer assets have often been slow and bogged down by bureaucracy.
Mainga reminded senators that legal restrictions also make it difficult for Kenya Railways to recover money owed by other state agencies.
“You know the law blocks us from taking other agencies to court for debt recovery, or auctioning of property to recover debt,” he said.
Senators urged the corporation to speed up the process and find temporary solutions for pensioners who cannot afford to wait. Kajiado Senator Samuel Kanar Seki expressed frustration at the long delays, saying the government must find ways to protect retirees from unnecessary suffering.
“It is unfair that pensioners who served this country diligently have to wait decades for their rightful dues,” he said.
He also suggested the use of debt recovery agencies to pursue pending remittances from government institutions.
Even as Kenya Railways moves towards asset sales, the plan has stirred unrest on the ground. Residents of Makongeni have held demonstrations over the past week to oppose the sale of the estate, worrying that the disposal of the land could disrupt their homes and displace long-standing communities.
Their protests add social tension to a financial decision that already carries political weight.
Despite these challenges, Mainga assured lawmakers that Kenya Railways is committed to ensuring the pension crisis is resolved permanently.
He said the corporation intends to clear all outstanding balances by early next year and set up a system that guarantees consistent and reliable payments.
“We have a clear plan to ensure this does not repeat itself. Our goal is to clear all outstanding balances by early next year and secure a sustainable payment structure going forward,” he said.
If the plan proceeds smoothly, the sale of the prime city estates could signal a major turning point for the thousands of former Kenya Railways workers who have spent years fighting for what they earned. For many, this may be the first real sign that relief is coming.
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