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State to spend Sh212 billion on roads as it seeks more private sector capital in infrastructure

By Macharia Kamau - Apr 8th 2022
Kenya's Finance Minister Ukur Yatani holds up a briefcase containing the Government Budget for the 2022/23 fiscal year outside the National Treasury buildings in Nairobi, Kenya April 7, 2022. [Reuters, Thomas Mukoya]

The government will continue to spend heavily on infrastructure as it seeks to cement President Uhuru Kenyatta’s legacy of mega projects.

This is even as the government pushes for more private sector participation in infrastructure development, with the National Treasury saying a recent review of the Public-Private Partnership (PPP) Act has created increased interest among private players.

Over the next financial year starting July, the State plans to spend Sh212.5 billion in the construction, maintenance and repair of roads.

National Treasury Cabinet Secretary Ukur Yatani said the allocations would go towards ongoing and new projects.

“The government continues to expand critical infrastructure in roads, rail, air and seaports to create an enabling environment for economic recovery and employment creation,” he told MPs yesterday in the Budget Statement.

“Towards this end, I have proposed an allocation of Sh212.5 billion to support construction of roads and bridges as well as their rehabilitation and maintenance.”

The allocation is an increase from the Sh182 billion that Treasury set aside for road construction and maintenance in the current financial year.

Among the major projects that are expected to continue or start in the coming financial year include construction of the Nairobi-Mau Summit Road, the Eldoret bypass, dualling of the Eastern bypass, rehabilitation of the Kisumu-Kakamega Road, and upgrading of the Narok-Sekanani Road.

In his Budget speech, Mr Yatani said the recently enacted PPP Act, 2021 was attracting more private sector players after the process of investing in infrastructure was made easier.

The government has been keen on getting private capital in the sector to reduce reliance on debt, with the country seen to be running out of room for borrowing.

“The Public Private Partnerships (PPP) programme has gained traction under the new PPP Act 2021 that has reduced the number of approval processes, introduced timelines and strengthened the institutional framework by elevating the PPP Unit to a directorate in the National Treasury,” the CS said, adding that there are a number of projects now lined up as investors seek to invest in Kenya.

“So far, the government has achieved closure on a number of projects, of which a key one seeks to deliver over 4,000 housing units to frontline Kenya Defence Forces personnel.”

The government has tried for years to bring the private sector on board in developing mega projects but success remained elusive. It has, however, recently scored huge wins with the Nairobi Expressway project and the Nairobi-Mau Summit Road.

The Expressway, built at a cost of Sh88 billion, is the first major project put up under the PPP model. China Road and Bridge Corporation designed the 27-kilometre road between Mlolongo and Westlands, sourced for funds and will operate it for the next three decades, charging motorists a road toll for maintenance and also to recoup its investment.

Construction of the Nairobi-Mau Summit Road is set to commence this year. The Rift Valley Highway Company is expected to build the 233-kilometre road at a cost of Sh160 billion through the PPP model.

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