Kenya to seek US$1.3bn financial assistance to upgrade 2 highways

Road construction Kenya
Construction works on Southern by-pass and Mombasa road intersection in Nairobi

Kenya is in the plans of upgrading the Mombasa-Nairobi (A109) and Nairobi-Nakuru (A104) highway sections to a dual-carriage road, but is planning to market the project to raise the US$ 1.3bn needed for the projects.

Transport and Infrastructure Cabinet secretary Michael Kamau confirmed the reports and said that the Kenyan government will place their focus on seeking funds for the highway construction projects from foreign financiers and commercial banks.

Mr. Kamau pointed out that the ministry is determined to fulfill the goal of the dual-carriage highways through a public private partnership (PPP) model.

“The government has conducted benchmarking in other countries and found that the public private partnership (PPP) model is the best option to fund these projects,” he further said.

The costs of constructing a kilometre of a dual-carriage road are put at US$ 2m and since the ministry is intending to develop a 681-kilometre road, then they will need around US$ 1.3bn. However, the amount might move upwards if traffic demands of the highway were to be four-lane road, and if there will be any additions such as interchanges and service lanes.

The packaging and marketing of this highway construction project has already been delegated to specific transaction advisors who have been given the task of working on the tendering processes, undertaking feasibility studies and also assisting the government in procurement work. They will market the road construction projects to potential concessionaires in the international markets.

The Nairobi-Nakuru highway transaction advisors are Intercontinental Consultants and Technocrats (ICT) Ltd from India and PricewaterhouseCoopers (PwC) will handle the Mombasa-Nairobi highway.

The country has started off 10, 000km annuity roads project in which it targets to rehabilitate and/construct new roads. Some companies have already been pre-qualified for the annuity road construction projects, although local firms cried foul of the process. Local banks also are funding the annuity road project, although have previously reported issues with the same.

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