economy
Ruto puts the most expensive road in Uhuru on hold
Tuesday, January 10, 2023
President William Ruto has stopped the construction of the Sh160 billion Mau Summit Expressway. PHOTO | NMG
President William Ruto has put the construction of the Sh160 Mau Summit Expressway on hold, throwing contractors and financiers of Kenya’s most expensive road project into a tailspin.
Initiated by retired President Uhuru Kenyatta, the construction of the 233 kilometer Nairobi-Nakuru-Mau Summit toll road, which was originally scheduled to start in September 2021, was awaiting President Ruto’s approval.
A consortium of three French companies indicated that they are ready to start the project after receiving financial support from the African Development Bank (AfDB) and the World Bank.
However, sources close to the project say the new administration has been cautious about the toll which they fear will shake the economy of President Ruto’s Rift Valley backyard.
The French consortium, made up of Vinci Highways SAS, Meridian Infrastructure Africa Fund and Vinci Concessions SAS, was expected to recoup its investment in 30 years by charging tolls to use the road.
This is the last hurdle of the project, the start of which was also delayed by a petition from one of the defeated bidders.
The Mau Summit Road, which would be widened to a four-lane, two-carriageway through a public-private partnership (PPP) model, is the main artery from Nairobi to western Kenya and the neighboring countries of Uganda, Rwanda and the Democratic Republic of Congo.
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The delays in extending the Mau summit continue a trend in which Ruto’s government has canceled some of the projects launched by his predecessor.
The Business Daily has not received an official comment from Transport Secretary Kipchumba Murkomen’s cabinet on why the new administration has stalled the project, but sources revealed that one of the main sticking points was the lack of an alternative route for motorists who did not want to pay tolls, such as the expressway. in Nairobi.
“During the Naivasha-Nakuru stakeholders meeting, one of the most contentious issues was finding an alternative route for users who wanted to pay for the road,” said the source, who did not want to be named as he was not authorized to speak to the newspaper.
To cope with the challenge, the contractors came up with a plan according to which those who moved within the county would be exempted from paying tolls.
However, those who move from one county to another will have to pay tolls. “As we speak, I cannot tell you whether the project has been launched or not. The new government may terminate it,” the source said, noting that the new administration may have decided to terminate it to open it up to other contractors.
The Kenya National Highways Authority (Kenha), which is the procurement agency, has meanwhile finalized the leeward issue. They will use the existing leeward lands owned by Kenha, which means that there will be no acquisition of new land.
French contractors have already prepared a feasibility study and shared it with Kenha. “What remains is financial closure, and that will depend on the current administration.”
Construction of the road was due to start in September 2021. Last September, the visiting French Minister of State for Development, Francophonie and International Partnerships, Ms Chrysoula Zacharopoulou, said it was up to Dr Ruto to decide when work on the northern corridor would begin. the road would begin.
“We have to continue the talks, obviously, but it would be something important and it would be nice if the new administration talked to the companies,” she said a day after attending Dr. Ruto’s inauguration and later meeting with him at the State House to discuss priorities in their bilateral relations.
“It [discussion] it was slowed down by the election period but now we are ready and all the companies and financiers are waiting to put money into it but they are waiting for Kenya to do its part.”
Proponents of the toll road argued that since it stretches across the most densely populated parts of the country, starting from Nairobi, Kenya’s capital and commercial nerve center, and passing through several districts in Nakuru and Kiambu, agricultural zones, wildlife reserves and tourist centers , expansion would dramatically improve the country’s economic fortunes.
The road also forms part of the strategic “Northern Corridor” which is East Africa’s busiest trade and transport corridor, providing passage to Kenya’s landlocked neighbours, the AfDB said.
In July last year, the AfDB approved $150 million (Sh18.5 billion) in financing to support the project, which will see the existing 175-kilometre A8 road from Rironi to Mau Summit transformed into a four-lane road and 57.8 km of two-lane roads. lane A8 south, from Rironi to Naivasha strengthened and maintained over a period of 30 years.
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This was the first PPP project approved by the AfDB board under the bank’s recently established PPP framework.
The World Bank Group, through its two subsidiaries, was also to be the main financier of the Nairobi-Nakuru-Mau toll road along with various other PPP projects totaling US$2.5 billion (Sh308.5 billion) for the period between 2023 . and 2027. .
The International Finance Corporation (IFC), the private arm of the World Bank, was to inject an unspecified amount of debt or equity into the project.
The International Development Association (IDA), another arm of the World Bank Group that helps poor countries, was expected to provide a partial risk guarantee for the four-lane highway, putting the World Bank in the driving seat of the Sh184 billion project.
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