Economy
Ruto puts Uhuru’s most expensive road on hold
Tuesday January 10 2023
President William Ruto has put the construction of the Sh160 billion Mau Summit highway on ice. PHOTO | NMG
President William Ruto has put the construction of the Sh160 billion Mau Summit highway on ice, throwing contractors and funders of what is Kenya’s most expensive road project into a spin.
Initiated by retired President Uhuru Kenyatta, the construction of the 233-kilometre Nairobi-Nakuru-Mau Summit Toll Road that was initially meant to kick off in September 2021 has been awaiting the approval of President Ruto.
A consortium of three French firms indicated that they were ready to break ground on the project having received the financial backing of the African Development Bank (AfDB) and the World Bank.
However, sources close to the project say the new administration has been cagey about the tolling of the road which they fear will roil the economy of President Ruto’s Rift Valley backyard.
The French consortium, made up of Vinci Highways SAS, Meridian Infrastructure Africa Fund, and Vinci Concessions SAS, was expected to recoup its investments in 30 years by charging toll fees for the use of the road.
This is the latest hurdle of the project whose start was also delayed by a petition by one of the losing bidders.
Mau Summit road, which would have been expanded into a four-lane dual carriageway through a Public-Private Partnership (PPP) model, is the main artery from Nairobi to western Kenya and the neighbouring countries of Uganda, Rwanda and the Democratic Republic of the Congo.
READ: President Ruto to reverse Uhuru’s termination of JKIA deal
The delays on the expansion of the Mau Summit continue a trend where Ruto’s government has been rolling back some of the projects initiated by his predecessor.
The Business Daily did not get an official comment from the Cabinet Secretary for Transport Kipchumba Murkomen on why the new administration had put brakes on the project, but sources disclosed that one of the major sticky issues has been the absence of an alternative route for motorists who did not want to pay toll fees, as is the case with the Nairobi Expressway.
“During the Naivasha-Nakuru stakeholder meeting, one of the most contentious was finding an alternative route for users who did want to pay for the road,” said the source, who did not want to be named as he is not allowed to speak to the Press.
To deal with the challenge, the contractors came up with a plan that would see those whose movements were within a county exempted from paying toll fees.
However, those moving from one county to the other will have to pay toll fees. “As we speak, I can’t tell you whether the project is on or not. The new government can terminate it,” said the source, noting that the new administration might have decided to terminate it to open it to other contractors.
The Kenya National Highways Authority (Kenha), which is the procuring agency, has since finalised the issue of lee ways. They will be using existing lee ways owned by Kenha, which means that there will be no acquisition of new land.
The French contractors have already done the feasibility study and shared it with Kenha. “What remains is financial closure and that will depend on the current administration.”
The construction of the road had been slated to start in September 2021. In September last year visiting French Minister of State for Development, Francophonie and International Partnerships, Ms Chrysoula Zacharopoulou, said it was up to Dr Ruto to decide when works on the Northern Corridor road would begin.
“We have to resume talks, obviously, but it would be something important and would be nicer for the new administration to speak with the companies,” she said a day after attending Dr Ruto’s inauguration and later met with him at State House to discuss priorities in their bilateral relationships.
“It [discussion] has been slowed by the electoral period, but now we are ready, and all the companies and financiers are waiting to put money into it, but they are waiting for Kenya to resume its part.”
Proponents of the toll road argued that because it stretches across the most densely populated parts of the country, beginning in Nairobi, Kenya’s capital and commercial nerve centre, and traverses several counties in Nakuru and Kiambu, agricultural zones, wildlife reserves and tourism centres, its expansion would dramatically improve the country’s economic fortunes.
The road also forms part of the strategic “Northern Corridor” which is the busiest trade and transport corridor in East Africa, providing gateway access to Kenya’s landlocked neighbouring countries, said AfDB.
In July last year, AfDB approved financing of $150 million (Sh18.5 billion) to support the project, which will see the existing 175-kilometre A8 road from Rironi to Mau Summit transformed into a four-lane carriageway and the 57.8km two-lane A8 South, from Rironi to Naivasha strengthened and maintained over a period of 30 years.
READ: Sectors African investors are eyeing in Ruto government
This was the first PPP project that AfDB’s board approved under the bank’s recently established PPP Framework.
The World Bank Group, through two of its subsidiaries, was also going to be a major financier of the Nairobi-Nakuru-Mau toll road together with various other PPP projects totalling $2.5 billion (Sh308.5 billion) for the period between 2023 and 2027.
International Finance Corporation (IFC), the private arm of the World Bank, was to inject an unspecified sum either debt or equity into the project.
The International Development Association (IDA), another arm of the World Bank Group that helps poor countries, was expected to provide a partial risk guarantee for the four-lane highway, putting the World Bank in the driver’s seat of the Sh184 billion project.
