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The soaring road costs: Puzzle of Sh1b per kilometre

By Vincent Achuka | Published Sun, September 23rd 2018 at 00:00, Updated September 22nd 2018 at 22:16 GMT +3
A section of Dongo Kundu bypass in Mombasa. When completed, the road will have cost Sh40 billion or Sh1.5 billion per kilometre. [File, Standard]

When the US announced last month that it will fund construction of an expressway between Nairobi and Mombasa, it added swell to the paradox of exactly how much it costs to build a road today.

Projected to cost Sh380 billion ($3.8 billion), the road will join an emerging league of Sh1 billion per kilometre roads. The 466 kilometres expressway has been criticised by economic analysts for being an unnecessary project.

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Running parallel to the Standard Gauge Railway (SGR), itself yet to achieve 100 per cent passenger load factor and its cargo section struggling, the new road will also run next to the existing highway.

Grand projects

It will have 48 kilometres of interchanges, 76 overpasses, 21 underpasses, 189 kilometres of local roads and 189 culverts. It will be a toll road with motorists paying a fee to use it.

And with such engineering, Thika Road, which ushered Kenya into the era of grand road projects, is going to sound like a distant memory.

What is raising questions, however, is the huge cost of the road which will amount to roughly Sh900 million per kilometre. And it is not just this particular road which economists and MPs have raised questions on.

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Everywhere you look, almost every new mega road project coming up costs about a billion shillings per kilometre. With a desire to enhance traffic flow and propel the country into the future, the government’s spending on gigantic road projects continues even as the state searches for answers on how it will reduce expenditure.

Two weeks ago, President Uhuru Kenyatta said all new infrastructure costs money and Kenyans have no option than to pay.

“All this costs money. Your taxes have paid for clear, tangible progress; this development trajectory will propel our country to new heights of prosperity,” said the President.

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To date no one knows how much Outering road will eventually cost when completed. The 13km dual carriageway was to cost Sh7.4 billion, but the amount was raised to Sh9.2 billion in 2015. In April this year, the government pumped in another Sh880 million for 11 footbridges at an average cost of Sh80 million per bridge.

A crunch of data on all road projects shows taxpayers are paying an average Sh181 million for every new kilometre of tarmac being laid. This is up from the Sh83 million per kilometre five years ago in 2013.

During this period, the shilling has depreciated by 16 per cent against the dollar from 86 to 100, while the price of crude has dropped by 31 per cent from $110 per barrel to $75. Since the price of roadconstruction is calculated in dollars, the exchange rate and the price of crude oil are crucial determinants on the overall cost.

Analysts say this huge price variation is motivated by other factors other than the actual cost.

“Road construction costs, like all major infrastructure projects, are being held hostage by among other reasons single sourcing of contractors in questionable government to government deals and kickbacks,” says economics lecturer Dr Samuel Nyandemo.

“Otherwise, why would there be a huge difference between the costs of a road constructed in Kenya and its neighbours?” he asks.

According to the World Bank, the average price per kilometre of road in the Democratic Republic of Congo is Sh34 million while in Ethiopia, it’s Sh83 million. But in Mombasa, the new 25.8 kilometreDongo Kundu bypass, whose first phase was recently opened by Uhuru, will cost Sh40 billion or Sh1.5 billion per kilometre.

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Across the border, Ethiopia, which has similar infrastructure ambitions like Kenya, is building a 200km Modjo-Hawassa Expressway, which like most Kenyan big budget roads is being funded by the Chinese. It will have six lanes, several over passes, and will be a toll road just like the new Mombasa-Nairobi highway. It will however cost Sh350 million ($700 million) per kilometre compared to the Sh900 million per kilometre for Mombasa-Nairobi Highway.

The government however insists it is a matter of design. “You can go to a shop and find one suit costing Sh10,000 and you go to another and find another suit costing a million shillings. You need to look at the road designs first,” says Transport Cabinet Secretary James Macharia.

In Mombasa, the 10-kilometre first phase of Dongo Kundu, which was opened to the public in May, cost Sh11 billion or roughly Sh1 billion per kilometre. It runs from Mombasa Port’s second container terminal and links the highway at Bonje, near Mazeras.

The second and third phase whose construction has already started involves construction of an 8.9-km road between Mwache Junction and Mteza, and a 6.9-km road from Mteza and Kibundani connecting the highway to the Likoni-Lunga Lunga road. The two phases will cost Sh30 billion.

In Nairobi, the 16.5 kilometre Western Bypass whose construction is funded by the China Exim Bank will cost Sh17.3 billion, also putting it as one of the most expensive projects undertaken by the government.

Search for funding

The four lane road will connect the Southern Bypass at Gitaru and the Northern Bypass at Ruaka. It has been designed to allow motorists drive at 100km per hour and will have interchanges and overpasses at major junctions at Wangige, Kihara, Ndenderu and Ruaka.

The 31 kilometre Northern Bypass, whose dualling is soon expected to start if the government gets funding having signed a commercial agreement with state owned Chinese firm Sinohydro, has been projected to cost between Sh30 billion to Sh31 billion.

And if this surprises you, then the Jomo Kenyatta International Airport (JKIA)-Rironi highway will astound you. The road will cost a staggering Sh59 billion or Sh1.3 billion per kilometre. Initially designed to cost Sh38 billion, the highway was supposed to be a double decker road above Uhuru Highway.

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But in February, the government decided to change the design and introduce flyovers and underpasses on some sections of the 43.5km road which was conceptualised in 2010 but has remained a dream because of design changes and difficulty in getting funding.

The project was to start in 2011 but the World Bank declined to release funds since the original contractor, Strabug, had been blacklisted by the international lender for failing to comply with some environmental and land acquisition procedures.

“The project designs have been evolving along with the costs,” Kenya Highways Management Authority Develoment Director David Muchilwa said two months ago on the huge variation in costs.

The road will now be competed in three stages. The first phase, which runs from JKIA to Likoni road (6.5) kilometres will cost Sh8 billion and will be funded by the Africa Development Bank (AfDB). Phase two runs for 12 kilometres to connect Likoni Road to James Gichuru Road and will cost Sh25 billion or Sh2 billion per kilometre.

The 25 kilometre third phase will go up to Rironi on the Nairobi-Nakuru highway and will cost Sh16 billion.

“Ask yourself what does the Western Bypass involve in terms of design and engineering. It has seven interchanges.

“We have also done roads whose cost per kilometre is less than Sh30 million,” says Macharia.

Interestingly, when you compare these incoming gigantic road projects to already existing ones like the Thika Superhighway, the variation is simply too large to ignore.

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Constructed at a total cost of Sh36 billion for eight lanes, the highway was the first mega project to cost about Sh100 million per kilometer if you base it at the shilling vs dollar exchange rate at that time. Interestingly, the construction tenders for a good number of these new expensive roads are awarded to companies pushed down the throat of the Kenyan government by the financiers, raising more questions as to whether Kenyans are getting value for money.

In March, Parliament raised queries on how the contract for the construction of the Nairobi-Mombasa expressway was awarded to American firm Betchel. The Transport Committee also said the project’s implementing agency – Kenya National Highways Authority – did not consult all the stakeholders during the public participation phase, which is a constitutional requirement.

 


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