The 13-kilometre Outer Ring Road expansion project, which has been underway since September 2014, has faced numerous challenges including hiccups in relocating utility lines and conflicts among the stakeholders involved in the project.
Soon after its ground breaking on January 22, 2014, the project’s contractor disagreed with the Kenya Urban Roads Authority (Kura) regarding a Sh1.47 billion tax demand that had been slapped on it by the Kenya Revenue Authority.
The Chinese firm insisted that Kura should meet the tax obligation since it was not factored in the initial contract for the road that stretches from the Ruaraka-Thika Road Junction to Taj Mall in Embakasi.
Kura had, on the other hand, taken a firm stand that the contractor ought to have factored in taxation and should therefore pay the tax.
“The amount of VAT for road works is Sh1.47 billion and taxes for supervision consultant are Sh146.6 million,” Kura said in a statement.
A fierce war of words that ensued between the two parties saw the Outer Ring Road project grinding to a halt until September when Infrastructure PS John Mosonik assured the contractor that the government was doing everything possible to resolve the tax issues that threatened to derail the project.
“You know the law now requires that projects should factor in taxation as a component, however, some of these projects came before the law although for this one we took six to nine months to start, we are in discussion about it [tax],” he said.
The project’s delays were also occasioned by the stoppage of the project to allow for design variation to meet site conditions and improvements.
The new designs include elevation of Taj Mall flyover to a three level interchange and the erection of concrete piers for the entrance of the proposed market on Kangundo Road to ease the movement of pedestrians.
The design, however, reduced the width of the main carriageway to 7.5 metres from 9.0 metres. It also excluded the proposed Bus Rapid Transport corridor.
The cost of the civil works is estimated at Sh9.20 billion. This together with the Sh3.38 billion that the project’s consultants were paid brings the total cost of the project to Sh12.58 billion.
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