Kenya: Nairobi highway to cost 7 billion shillings more, but it is not state money – CS
The Nairobi highway will cost an additional 7.6 billion shillings, but Transport Cabinet Secretary James Macharia said it was not government money.
Mr Macharia responded to questions on Wednesday after it emerged that the road from Jomo Kenyatta International Airport to Westlands would need more money to be completed.
China Communications Construction Company (CCCC), the parent company of China Road and Bridge Corporation (CRBC), which finances and builds the highway, revealed in regulatory documents that the project’s contract value was $ 668 million (72 , 8 billion shillings).
This figure is higher than the initial budget estimate of $ 599 million (65.2 billion shillings) provided by the Kenya National Highways Authority (Kenha).
The project is funded through a public-private partnership, Macharia said.
“Let me stress one thing – we said it was private investment. CRBC can disclose its annual accounts in China. That’s their problem, because it has nothing to do with our budgeting. here. It’s a private investment, “he said. .
“They can do their own bookkeeping and they have their own way of accounting for it. But to be honest with you, it doesn’t matter. That’s why it’s as low as $ 1.
He added that the Kenyan government has not put a single penny into it and this demonstrates the confidence that the international investment community has in “our country”.
“For those who cannot afford the $ 1 fee, we have an alternative – the old route here will be available. This will be available for those who want to take 24 minutes from James Gichuru to JKIA,” he said. .
CCCC is listed on both the Shanghai and Hong Kong stock exchanges. Listed companies are required to make all contractual disclosures through regulatory filings to their shareholders.
Some contracts typically include cost escalation clauses to cover factors such as design variations and large increases in building materials.
Mr. Macharia was accompanied by State House Chief of Staff Nzioka Waita, Technical Assistant to President Mutahi Ngunyi and Principal Secretary of Transport Mwangi Maringa. President Uhuru Kenyatta is expected to officially commission the highway in April 2022.
The SC said the project is 64% complete and work will be completed in six months.
“The road tests will take place in March of next year, as we are confident that the contractors will have completed all work by February.”
“We have shortened the project from four years to two years and the contractors are working around the clock to achieve this goal.”
He said the highway, the first of its kind in East and Central Africa and the second largest toll road in Africa after the Dakar toll highway, is equivalent to having half of the Thika road suspended above it. from the Uhuru highway.
“The highway should not be seen as just an infrastructure project. It is part of a larger story of moving labor and capital much faster from one point to another,” did he declare.
“The highway is connected to the new four-lane Kangemi-Rironi highway and the new two-lane Western Bypass highway from Wangige to Ruaka.”
Mr Waita, for his part, said the project was a debt-free public-private partnership (PPP) from the government.
“This project is part of the Nairobi master plan and no funds have been borrowed by the government. It is purely PPP,” he added.
He also stressed that the highway will be a game-changer for Nairobi as an international hub.
Companies affected by construction will be compensated, excluding those having encroached on road reserves.
“I can say without fear of any contradiction that President Uhuru Kenyatta’s commitment to bridging the infrastructure gap will be honored at the end of his term,” he added.
Construction of the 64 billion shillings highway began in late 2020 and has come at a cost to businesses and residents of Mombasa Road as motorists endure traffic jams.
When completed, the road will stretch 27 km through Nairobi, and is intended to facilitate the flow of traffic in and out of the city center.
The construction is financed by CRBC. Moja Expressway, its subsidiary, will operate the road for 27 years to recover the money from toll charges.
Earlier this month, the contractor began hiring 36 toll workers and two account clerks ahead of scheduled completion.
Kenyans are expected to pay between 100 and 1,550 shillings in toll, depending on the size of the vehicle and the distance traveled. The fees will be based on the dollar to protect the Chinese operator from exchange rate losses.
Meanwhile, Macharia denied reports that a US company tasked with building the 300 billion shillings Nairobi-Mombasa highway rejected Kenya’s proposal to build the road and recover its costs through toll charges. .
He also said plans for the Rironi-Nakuru-Mau summit road were at an advanced stage after the government entered into a public-private partnership with the French Business Consortium to build the 233 km highway for 160 billion. of shillings.
Cécile Brandao, CEO of Rift Valley Highway Ltd, said the rationale for the project made sense to them and they wanted to improve the capacity and safety of the road and provide first-world infrastructure.