Govt. in talks with private investors to build, toll five key roads
The government has earmarked five major roads to be constructed and maintained under the public private partnership (PPP) model.
The five roads will cost an estimated Sh350 billion, with the government seeking private sector support to finance construction.
The move is expected to ensure the government maintains its aggressive bid to invest in infrastructure.
Infrastructure Principal Secretary Eng. John Mosonik said the Private Public Partnership Unit, a department under Treasury, will oversee the financing of the roads and bridge project that will spur economic growth.
“Maintenance has been costly having the network increase, that’s why this year fuel increased from Sh12 to Sh18 per litre for fuel levy so that we can be able to maintain,” said Eng Mosonik.
PPPs have been touted as a promising route to fund new infrastructure across Africa, a continent that struggles with poor transport networks.
Roads lined up under the PPP framework include dualing and upgrade of the Nairobi-Mombasa road, Nairobi -Nakuru -Mau summit road, operation and maintenance of Nairobi-Thika superhighway and Nairobi-southern bypass which will be executed through private capital initiative.
Private sector players will also be called in to finance the construction of the second Nyali Bridge.
Private Public Partnership Unit Director Eng Stanley Kamau said the public private model would enable the country undertake more infrastructure projects.
“We want to close the infrastructure gap which stands between Sh300 billion to Sh400 billion. In the road sector the gap could close to about Sh200 billion. We are moving from budgetary allocation and it’s likely we are going to meet the funding gap,” Eng Kamau said.
Analysts however argue that financing has often stumbled over government guarantees and revenue sharing deals.
To tackle this, the Ministry of Transport and Infrastructure announced it would allow the private investors to toll the roads to recoup their investment.
Kenya National Highways Authority (KeNHA) Director General Eng. Peter Mundinia said under the proposed deal, private sector players will provide the funds needed for the road projects and maintain the roads for a period of 30 years.
“If you are receiving like Sh10 billion and spend half a billion on that, the moment you bring users to service that road that money will address other areas. What we need to move out is double taxation. If you are living in Kisumu and you are not using Thika road, you will not be told to pay. The only person using the road will pay,” Eng Mundinia said.
The ministry has picked PriceWaterhouseCoopers, Deloitte and other firms as transaction advisers for the projects.
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