KURA signs US $132m deal for stalled roads projects

KURA signs US $132m deal for stalled roads projects

The Kenya Urban Roads Authority has signed a US $132m deal with a consortium of Lee Construction Limited, Cape Construction and Moto Engil Africa for the construction and maintenance of stalled roads in Western and Central Kenya.

KURA Director General, Silas Kinoti  said that the deal breathes a new lease of life for the Roads Annuity Program which has been facing a number of interlocking challenges mainly defined by inadequacy of financing partners.

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Roads projects

The two Private Public Partnership (PPP) agreements will oversee the construction and maintenance of roads across ten counties. Under the new deal are Riamukurwe-Gatitu road in Nyeri County, Kanjuki-Mauktano road in Tharaka-Nithi and the Busia-Alupe bypass in Western Kenya.

The project that will cover 80-kilometres of road will continue for the next decade. The government had an initial plan of completing 2000 kilometers of road within the 2014/15 financial year.

Other key road projects highlighted under the Road Annuity Project include the dual-ling of the Nairobi-Mombasa highway with the commercial contract already in place, the second Nyali Bridge in Mombasa and the Nairobi-Narok-Mau Summit highway.

A further 8000 kilometers of road was to be revamped in subsequent years only for the project to run into financing headwinds. The challenges were inflated costs, credit-worthiness queries by lenders and the snail-pace of contracts approvals.

“Roads under construction currently stand at 6,400 kilometers. Once we start the construction of a road; we are due to finish it. We hope to get to the 10,000 kilometers stock over the next two years,” said Transport CS James Macharia.

Partnerships with the private sector

Cognizant of the dependency of infrastructure financing on the annual budget, the Cabinet approved partnerships with the private sector in March 2015. This was done with the objective of developing and rehabilitating 10,000 kilometers of road through long-term contracts.

“Despite of the evolving challenges, KURA remains keen on the private-public initiated financing reading benefits for contractors, bankers, consultants and equipment suppliers. We are confident that the lot of annuity projects will result in greater economic benefits to the beneficiary urban counties,” said Silas Kinoti.

 

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