Nairobi Expressway to cost Sh7bn more, but it's not State money - CS
Thursday, September 30, 2021
The ongoing construction of the Nairobi Expressway on September 29, 2021.
Evans Habil | Nation Media Group
By
Hilary Kimuyu
Nation Media Group
What you need to know:
- The figure is higher than the $599 million (Sh65.2 billion) initial budget estimate provided by the Kenya National Highways Authority (Kenha).
- CS Macharia says the Kenyan government has not put a single penny in the project, noting that this demonstrates the confidence the international investor community has in “our country”.
- CS Macharia was accompanied by State House chief of staff Nzioka Waita, Technical Assistant to the President Mutahi Ngunyi and Transport PS Mwangi Maringa.
The Nairobi Expressway will cost Sh7.6 billion more, but Transport Cabinet Secretary James Macharia has said it is not government money.
Mr Macharia was responding to questions on Wednesday after it emerged that the road linking Jomo Kenyatta International Airport to Westlands will need more money to complete.
China Communications Construction Company (CCCC), the parent firm of China Road and Bridge Corporation (CRBC), which is funding and building the highway, revealed in regulatory filings that the project’s contract value is $668 million (Sh72.8 billion).
The figure is higher than the $599 million (Sh65.2 billion) initial budget estimate provided by the Kenya National Highways Authority (Kenha).
The project is funded under a public-private partnership, Mr Macharia has said.
“Let me emphasise one thing - we said this is a private investment. CRBC can disclose their annual report accounts in China. That is their issue, because it has nothing to do with our budgeting here. It is a private investment,” he said.
“They can do their own accounting and they have their own way of accounting for it. But to be frank with you, it is not material. What is material is to make sure we safeguard the payments of the toll, to make sure Kenyans can afford it. That is why it is as low as $1.”
He added that the Kenyan government has not put a single penny in it and that demonstrates the confidence the international investor community has in “our country”.
“For those who will not be able to afford the $1 fee, we have an alternative - the old road down here will be available for use. This one will be available for those who want to take 24 minutes from James Gichuru to JKIA,” he said.
CCCC is listed on both the Shanghai and Hong Kong stock exchanges. Listed firms are required to make all contractual disclosures through regulatory filings to their shareholders.
Some contracts usually have escalation cost clauses to cover factors such as design variations and steep rises in construction materials.
Mr Macharia was accompanied by State House chief of staff Nzioka Waita, Technical Assistant to the President Mutahi Ngunyi and Transport Principal Secretary Mwangi Maringa. President Uhuru Kenyatta is expected to officially commission the expressway in April 2022.
The CS said the project is 64 per cent complete and the work will end in six months.
“Test runs on the road will take place in March next year as we are confident that the contractors will have completed all works by February.”
“We shortened the project from four years to two years and the contractors work 24 hours to meet that target.”
He said the expressway, the first of its kind in East and Central Africa and the second-largest toll road in Africa after the Dakar Toll Highway, is the equivalent of having half of Thika Road suspended above Uhuru Highway.
“The expressway must not be seen as just an infrastructural project. It’s part of a bigger story of moving labour and capital much faster from point to point,” he said.
“The expressway links to the new Kangemi-Rironi four-lane dual carriageway and the new Western Bypass dual carriageway running from Wangige to Ruaka.”
Mr Waita, for his part, said that the project was a public-private partnership (PPP) with no debt incurred by the government.
“This project fits in the Nairobi masterplan and no single fund has been borrowed by the government. It is purely PPP,” he added.
He also emphasized that the expressway will be a game changer for Nairobi as an international hub.
Businesses affected by the construction will be compensated, excluding those that had encroached on road reserves.
“I can say without fear of any contradiction that President Uhuru Kenyatta's commitment to bridging the infrastructure gap will be honoured by the time his term comes to an end,” he added.
Ease traffic
Construction of the Sh64 billion expressway started in late 2020 and has come at a cost for businesses and residents on Mombasa Road, with motorists enduring heavy traffic snarl-ups.
On completion, the road will stretch 27km across Nairobi, and it is meant to ease traffic flows in and out of the city centre.
The construction is funded by CRBC. Moja Expressway, its subsidiary, will operate the road for 27 years to recoup the money through toll fees.
The contractor earlier this month started recruiting 36 toll attendants and two account clerks ahead of scheduled completion.
Kenyans are expected to pay between Sh100 and Sh1,550 in toll charges, depending on the size of the vehicle and the distance covered. The charges will be dollar-based to cushion the Chinese operator from exchange rate losses.
Meanwhile, Mr Macharia has denied reports that a US firm contracted to build the Sh300 billion Nairobi-Mombasa Expressway had rejected Kenya’s proposal that it construct the road and recover its costs from toll fees.
He also said that plans for the Rironi-Nakuru-Mau Summit road were at an advanced stage after the government entered into a public-private partnership with the French Consortium of Companies to build the 233km highway for Sh160 billion.
Rift Valley Highway Ltd CEO Cecile Brandao said that the rationale for the project made sense to them and they wanted to improve the capacity and safety of the road and deliver first-world infrastructure.
CS says the extra funding is not taxpayer money.