The Public-Private-Partnership (PPP) Committee has granted first-stage approval for constructing the Nairobi-Mombasa Expressway.
The National Treasury reports that the 473 km highway is now in the advanced stages of preparation following the approval.
The approval paves the way for the progression of the project into the development phase. The Treasury projects that the construction will cost Ksh555 billion.
“Mobilisation of private sector resources to develop and expand key trunk networks in the country, such as the Mombasa-Nairobi Expressway, which is at advanced stages of preparations, having been by been granted first stage approval by the PPP committee recently and therefore ready to progress to the project development phase. Estimated cost is $3.6 billion” it said.
According to the Treasury, the Nairobi-Mombasa Expressway aims to alleviate severe congestion and enhance travel speeds between the cities.
Initial Ksh230 Billion Deal Fell Through
In 2017, Kenya made significant progress on the mega project by entering a Ksh230 billion deal with the American engineering firm Bechtel. This agreement marked the initiation of the subsequent stage, which focused on securing financing from export credit agencies in the US.
However, four years later, Bechtel declined Kenya’s proposal to construct the road and recoup its expenses through toll fees imposed on motorists. Bechtel argued that the PPP model would result in a cost five times higher, amounting to $15 billion (Ksh2.23 trillion).
The Parliamentary Budget Office (PBO) said that Bechtel wanted the State to directly fund the construction of the expressway instead of adopting the toll model. The PBO advises lawmakers on the economy and budget.
In September 2021, the PBO stated, “The contractor has indicated that the country will receive better value for money if the road is constructed under an EPC (Engineering, Procurement, and Construction) model rather than a toll model.”
Virgin Land A Deal Breaker
Insiders at the Kenya National Highways Authority (KeNHA) revealed that the US firm also insisted on a pristine land corridor for the project. This stipulation posed discomfort for the State, given that it would necessitate the expensive acquisition of land.
“The request for virgin land was contested because KeNHa already has a sufficient reserve on the current road corridor. It would not make sense to buy fresh land for the road project,” a State official said as quoted by the Nation.
However, in July 2022, the Korean Overseas Infrastructure and Urban Development Corporation Africa (KIND) submitted a feasibility study to the Kenyan government, proposing a Public-Private Partnership (PPP) model.
After establishing its fourth overseas office in Nairobi in July 2017, KIND has taken over control of the Nairobi-Mombasa Expressway project.
Nevertheless, Bechtel has indicated its willingness to move forward with the project in “the most fiscally responsible way” to benefit the people of Kenya.
