James Macharia
National Treasury
Public Private Partnership

US firm to fund, build Mombasa-Nairobi expressway

The Sh300 billion Nairobi-Mombasa expressway will now be built and owned by a private investor after the government opted out of taking a loan to build the mega highway to curb the ballooning public debt.

Transport and Infrastructure Cabinet Secretary (CS) James Macharia said Tuesday the 473-kilometre road will be built using money from private investors who will then recoup back their cost by charging a toll fee.

The State has come under increasing pressure to cut increasing public debt that is now threatening to cross the Sh5 trillion mark.

American contractor Bechtel Executive, tapped to build the road, has been pushing Kenya to take a loan for the project, arguing the Public Private Partnership (PPP) model would cost the government Sh540 billion in the next 25 years.

Mr Macharia maintained the PPP model, which will later see the infrastructure transferred to the State, was a cheaper option for taxpayers.

“We do not want to take more debt if the private sector can do the job. National Treasury team through the PPP unit and their advisers have done the maths, and preference is for PPP option,” Mr Macharia said in a telephone interview.

Kenya’s public debt, whose rapid build-up has triggered warnings from international agencies such as the IMF, has for the first time exceed the Sh4.5 trillion mark, reflecting the Jubilee government’s increasing appetite for loans.

The debt in June 2013 was Sh1.8 trillion. Taxpayers will spend Sh870.52 billion or half of taxes on debt repayments in the year starting June.

The six-lane expressway, set to be constructed by one of the largest engineering and constructions firms in the world, will enable motorists to cruise uninterrupted on the highway at a speed of 120 kilometre per hour, reducing their travel time by half.

Kenyans will, however, pay a toll fee for cruising through the route that is currently characterised by heavy traffic gridlock especially by truckers.

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