Construction of a $2.1-billion expressway between the Kenyan capital of Nairobi and the port city of Mombasa hangs in the balance following a decision by President Ururu Kenyatta’s government not to finance the project through debt. Instead, it has directed the contractor, US construction giant Bechtel Corporation, to implement it as a public– private partnership (PPP).
Infrastructure principal secretary Julius Korir says that, while the Kenya government is committed to implementing the project, the National Treasury has directed that this should be on the basis of “zero borrowing on the part of government”.
“The ball is in the court of Bechtel and we are waiting for them to tell us how they intend to finance the project,” he tells Engineering News.
He adds that, in terms of the PPP agreement, government has assigned the construction of the project to the US firm, which will source funds for the expressway project and build it. The US company will operate the expressway but will hand it over to government after it has recouped its investment by charging toll fees.
Bechtel is currently undertaking a review of the feasibility study conducted by professional services firm PwC to ascertain the cost of implementation and the return on investment before taking a decision.
Early last month, Bechtel executives met National Treasury and Ministry of Transport officials in an attempt to convince government to cofinance the project through debt.
The firm is pushing for an engineering, procurement, construction and commissioning model on the basis that it will take years to recoup its investments through toll charges.
The expressway is a critical infrastructure project because it will enable Kenya to competitively develop and expand internal and regional trade.
The 473 km six-lane expressway will be a controlled motorway, where vehicles will travel at a consistent speed of 120 km/h. It will reduce the journey time between Mombasa and Nairobi from over ten hours to under four hours.
The expressway is intended to complement the standard-gauge railway line in the Nairobi–Mombasa corridor and help transform it into a vibrant and continuous economic zone.