High Court Puts Brakes on Government’s Kenya Pipeline Sale

Kenya Pipeline Company is no ordinary parastatal. Established in 1973, it operates the national petroleum pipeline network, transporting fuel from Mombasa to depots across the country. The company’s infrastructure spans over 1,300 kilometers and is valued in the tens of billions of shillings. KPC consistently posts strong financial results, with annual profits ranging between KSh 5 and 8 billion. Because it is both profitable and strategically vital to Kenya’s energy supply, its inclusion in the privatization plan was always likely to draw public attention and controversy.

The ruling marks a significant moment in the government’s 2025 privatization programme, which seeks to sell stakes in 35 state corporations to raise more than KSh 200 billion over the next three years. Proceeds from these sales are intended to reduce public debt, boost efficiency in state enterprises, and meet commitments under Kenya’s fiscal adjustment plans, including those tied to International Monetary Fund (IMF) agreements. KPC, given its scale and profitability, was among the crown jewels of this programme.

Cofek’s petition argues that the sale of KPC is not only premature but could also undermine public interest. The consumer advocacy body contends that the process has lacked adequate public participation, a constitutional requirement for major government decisions. It warns that transferring ownership of such a strategic asset to private possibly foreign interests could jeopardize national energy security, increase fuel transport costs, and ultimately raise prices for goods and services. Cofek also points out that once sold, reclaiming ownership of KPC would be nearly impossible, making thorough scrutiny essential before any irreversible steps are taken.

Justice Mwamuye’s orders will remain in place until the petition is determined, ensuring that no share transfer or sale-related action can proceed in the interim. This decision is grounded in the High Court’s constitutional mandate to issue conservatory orders to protect public interest while a case is ongoing. For the government, the ruling represents both a delay and a test of its resolve to see through its privatization goals. For the public, it offers a pause in which concerns about transparency, economic impact, and sovereignty can be aired.

This is not the first time Kenya’s courts have intervened in state asset sales. In previous years, judicial orders have delayed or blocked privatizations involving Kenya Airways, Uchumi Supermarkets’ properties, and other parastatals. These precedents highlight the judiciary’s willingness to weigh in when public interest or constitutional processes appear at risk.

Economically, the immediate impact of the halt will be a reassessment of the Treasury’s privatization timetable and revenue projections for the 2025/2026 financial year. Investor uncertainty may rise, especially in the energy sector, as potential buyers wait for legal clarity. In the medium term, if the sale is blocked, the government may need to find alternative revenue sources or scale back its spending plans. Conversely, if the court eventually allows the sale to proceed, the process could still face political pushback and logistical delays.

Public opinion remains divided. Opponents of the sale argue that KPC, as a profitable national asset, should remain under public ownership to ensure control over critical infrastructure. They fear privatization will lead to higher costs, job losses, and reduced public oversight. Supporters, however, contend that privatization could inject capital, improve efficiency, and reduce opportunities for corruption, citing international examples where partial privatization revitalized state enterprises.

The September 5 hearing will be pivotal in determining the future of KPC. The court could choose to extend the conservatory orders, allowing the case to proceed to a full trial, or it could lift the orders, enabling the government to resume sale preparations.