The Public Service Commission (PSC) has initiated an investigation into the undisclosed extension of Philip Mainga's tenure as Managing Director of Kenya Railways during the final days of the Jubilee Party Administration.
This clandestine arrangement is reported to have hindered the government's efforts to institute reforms within the organization.
Mainga assumed the position permanently in January 2020, having previously served as the acting boss following the suspension of Atanas Maina in August 2018 due to corruption allegations.
Although Mainga's contract was set to expire in January 2023, he has continued to hold office due to a behind-the-scenes deal said to have been struck just prior to the August 2022 general election.
According to an insider at the Kenya Railways Corporation (KRC), "The board of Kenya Railways Corporation (KRC) extended his term by three more years."
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Over the past eight months, eight out of the 15 major state corporations and agencies, collectively generating Sh538 billion in revenue based on their latest financial reports, have witnessed changes in both the board chairperson and managing director/director-general positions.
The ongoing reshuffle is part of President William Ruto government's broader efforts to revamp underperforming state agencies and enhance the performance of government-owned entities, continuing a tradition practiced by past administrations.
Key state corporations and agencies with newly appointed leaders include the Kenya Electricity Generating Company (KenGen), which now has a new board chair and managing director.
Julius Migos Ogamba assumed the role of KenGen board chairman in March, joining Abraham Samoei, the new managing director, who was appointed following the promotion of his predecessor, Rebecca Miano, to a Cabinet position.
Together, they are responsible for making crucial decisions for the company, which generated Sh49 billion in revenue, Sh4.7 billion in profits, and possessed assets worth over Sh500 billion last year.
Similarly, Kenya Power, a critical state-owned firm with the highest revenue among all government agencies and companies (Sh157 billion) and valued at Sh329 billion in assets by 2022, has witnessed changes in its board chair and managing director positions.
Joseph Siror was recently appointed managing director, while Joy Brenda Masinde assumed the role of board chair in December.
At Kenya Pipeline Company, which has assets valued at over Sh140 billion, Faith Boinett was appointed board chair in December, and Joe Sang returned as managing director last month.
In the case of Kenya Railways, partial changes have been made to the board. Mainga, who faces allegations of blatant corruption, is using his wealth to retain his position. He has reportedly bribed members of the new board, journalists, and even politicians who have dared to raise concerns.
One such flawed deal, executed by Mainga during Atanas Maina's tenure, involved Africa Star Railways (Afristar), the Chinese operator for the SGR line, resulting in Kenya Railways incurring daily losses of up to Sh1.4 million.
Additionally, Mainga is accused of unilaterally leasing Kenya Railways facilities, such as container yards and buildings, in Makongeni, Nairobi, for ten years without following internal procedures or seeking board approval.
According to a whistleblower report, Mainga was aware that the Kenya Ports Authority (KPA) had taken over the property in October 2018 without proper handover procedures.
Furthermore, the property was generating a monthly income of twenty-three million shillings (Sh23,000,000.00) for Kenya Railways. To date, Railways has incurred losses exceeding four hundred million shillings (Sh400,000,000.00) in the form of transportation and storage charges for containers at the ICDN.
The report also criticizes Mainga's involvement in leasing and lease extensions within the Nairobi Railway City development. It states, "Mr. Mainga recommended the leasing and extension of leases for Kenya Railway land, fully aware of the ongoing development of the Nairobi Railway City master plan by Kenya Railway and the Nairobi County Government."
Similar actions were taken regarding the leasing of land in the SGR Nairobi Station area, Syokimau Station, and adjoining areas. The report reveals, "Mr. Mainga recommended the leasing of over one hundred (100) acres of Kenya Railway land, fully aware of the ongoing development plan being undertaken by Kenya Railways, the Ministry of Lands, the County Government of Nairobi, and Machakos County."
