Kenya Railways to liquidate $123 million assets to settle pension arrears

The proposal follows escalating pressure from retirees and parliament over delayed pension payments, as the scheme continues to grapple with chronic liquidity shortfalls.

Philip Mainga, the Managing Director of Kenya Railways, told the Senate Committee on Labour and Social Welfare that a detailed repayment schedule has been structured through to January 2026.

“We are waiting for KENHA to pay … about KSh2 billion … that will enable us to clear the balances,” Mainga said, adding that the funds would go a long way toward settling the KSh2.26 billion ($17.5 million) owed in arrears.

Beyond the KENHA payment, Kenya Railways is preparing to market two of its most valuable urban estates, Makongeni and Ngara, as part of a broader strategy to shore up its pension fund in the long term.

He emphasised that the sales would give the retirement scheme a sustainable financial base: “The sale of these prime city assets … would provide the financial base needed to stabilise pension payments and ensure the scheme remains sustainable in the long term.”

Mainga also noted legal constraints, saying: “You know the law blocks us from taking other agencies to court for debt recovery, or auctioning of property to recover debt.”

As a result, railways must rely on voluntary asset sales rather than litigation.

In response, the Senate Committee urged Kenya Railways to expedite the disposal process and implement interim relief measures for the waiting retirees.

Kajiado Senator Samuel Kanar Seki suggested employing debt‑recovery agencies to enforce outstanding remittances by government institutions.

“It is unfair that pensioners who served this country diligently have to wait decades for their rightful dues,” he said, demanding greater accountability and swifter payouts.

Despite previous efforts to liquidate assets, the scheme’s funding gap has persisted due to bureaucratic delays and slow sales.

Mainga reassured lawmakers of the corporation’s commitment to ending the crisis once and for all: “We have a clear plan … Our goal is to clear all outstanding balances by early next year and secure a sustainable payment structure going forward.”

Recent protests by Makongeni residents opposed the proposed sale of the estate, raising political and social tensions around the move.

If executed as planned, this would be one of Kenya’s most significant state-led liquidations of idle property to meet pension obligations, and could finally relieve thousands of retirees who have waited years for their dues.