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Bumpy ride ahead as State privatises roads

By Macharia Kamau | June 13th 2020 at 12:00:00 GMT +0300

Kenyans will pay through their noses to use roads if the government’s plans to allow private firms to invest in road construction succeeds.

In his Budget Statement in Parliament on Thursday, The National Treasury Cabinet Secretary Ukur Yatani, said the government would amend laws governing the collection of toll fees on Kenyan roads to enable the Ministry of Transport and Infrastructure get into agreements with private sector players to collect fees from road users.

“The government has been encouraging investments under Public Private Partnership, particularly in the road sector. To further support such partnerships, I propose to amend the Public Roads Toll Act to enable the persons who enter into an agreement with the government to collect road tolls on roads constructed and managed under such agreements,” he said.

Analysts noted that this could be an attempt to make the country attractive for investors, who may be looking for opportunities to finance, construct and operate roads. The current framework does not allow private firms to collect toll fees.

Toll fund

Treasury had earlier this year published the draft Public Finance Management (National Toll Fund) Regulations, 2020. The regulations will establish a Fund, which according to Treasury, will receive all the money collected at toll stations on certain roads. The money will partly help the government in meeting financial obligations under the Public Private Partnership contract arrangements.

Treasury noted that the Fund would instil confidence in firms looking at the possibility of investing in road projects in Kenya as it gives them visibility over the amount of money available for debt service and meeting other financial obligations.

If the proposal goes through, motorists will pay road tolls to allowed to use some of the busiest roads.

Already, Kenyans pay the Road Maintenance Fuel Levy, which is attached to fuel prices and is the reason the cost of petroleum remains high. Currently, the levy stands at Sh18 per litre of super petrol and diesel.

Earmarked roads

The government has already earmarked a few roads, which have been finished and are already in use, for tolling amidst protests from Kenyans.

Most of the roads that will be subjected to road tolls will, however, be new ones to be built using the PPP model, where private firms finance construction and later manage the roads, with tolling expected to enable them recoup their investments as well as make profit.

This means that not only private motorists will suffer, but passenger service vehicle operators and transporters will have to charge more.

Major roads earmarked for tolling and which are already in use are the Nairobi Southern Bypass and Thika Road. Others are the planned Nairobi-Mombasa Expressway, the second Nyali Bridge that will connect Mombasa Island to the mainland and the Nairobi Mau Summit Road.

The JKIA-Westlands Expressway, whose construction President Uhuru Kenyatta broke ground for in October, is one of those users will pay for.

A report detailing the design of the road had said motorists would pay between Sh6 and Sh30 per kilometre, depending on size of the vehicle.

Roads Budget Treasury
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