Nairobi is gearing up for a new transport system, which is both efficient and cheaper. The commuter railway transport got a major boost when it was allocated Sh2.9 billion in the 2011/12 Budget. This will be used to modernize commuter railway services in Nairobi and its environs in an effort to decongest traffic in the city and ease commuting.

"The recent upward surge in the international oil prices has pushed cost of transport way out of reach of many urban workers thus reducing their disposal income," said Finance minister Uhuru Kenyatta in his budget statement on 8th June 201.  "This is, however, not the case for the few who still afford to find space in the limited commuter urban train services." Work has already started at the Syokimau station. When completed, it is expected to cut commuting costs by more than half.  Mr Kenyatta said it would cost Sh25 to travel from Embakasi to town and Sh35 from Ruiru to the city, down from Sh70 and Sh100, respectively, charged by PSVs.

Some Sh1 billion will be used to upgrade the Thika-Nairobi railway link, which passes through Ruiru via Makadara, Dandora, Githurai and Kahawa. A rail operator is expected to manage the proposed commuter service. Procurement of the operator is going on through an international tender advertised by the Kenya Railway Corporation and InfraCo Ltd (InfraCo Africa), a donor-funded privately managed infrastructure development company.

The project will also involve the construction of about seven kilometres of a new track to Jomo Kenyatta International Airport's Unit 3, and the rehabilitation or construction of stations and other facilities along the network.

The multi-phased project, whose cost is estimated to hit Sh24 billion once completed, is expected to link the city centre with outlying areas like Thika, Limuru and Athi River/Lukenya. Conceived in 1992 following a strike by matatu operators, the project began in April 2009, when the corporation signed a joint development agreement with InfraCo. InfraCo shoulders much of the upfront costs and risks of early stage development, reducing the entry costs of private sector infrastructure developers.

There is also the proposed modern railway line linking Mombasa and Kampala. The Standard Gauge Railway, with a branch line to Kisumu, has experienced procurement challenges since Kenyan and Ugandan governments entered into a bilateral agreement in 2008 to fast-track its development. Said Mr Kenyatta: "I now expect the Kenya Railways Corporation to conclude the design study by end of November 2011."

Kenya Railways is rehabilitating approximately 160 km of the rail system within Nairobi and constructing a new six-kilometre rail track to the JKIA and railway stations across the city.