How US–China Rivalry Killed Sh470bn Usahihi Expressway

One of Kenya’s most ambitious projects, a Sh470 billion highway linking Nairobi to Mombasa, has collapsed — and the reasons stretch far beyond technical paperwork. 

The project, billed as a game-changer for East Africa’s busiest transport corridor, became a stage for the power struggle between Washington and Beijing.

The 459-kilometre road, known as the Usahihi Expressway, has been shelved just over two years after President William Ruto witnessed the signing of the deal with US firm Everstrong Capital, which was to lead the project.

Construction was due to begin this year. However, in July 2025, the Public-Private Partnerships (PPP) Committee rejected the project’s development report.

Everstrong appealed to the PPP Petitions Committee, and in April 2026 a seven-member tribunal dismissed that appeal outright, ruling that Everstrong had failed to demonstrate adequate financial capacity, technical feasibility or overall viability under the PPP Act.

In a public notice, it said the proposal “does not meet the relevant criteria and should be abandoned in accordance with Section 43(11)(c) of the PPP Act, 2021.” 

The committee said a fresh plan could be resubmitted and suggested that expanding the A8 Nairobi–Mombasa highway might be the more practical option.

However, shortly after the reports surfaced in local media, Everstrong Capital moved to clarify that the project had not been cancelled, insisting the claims were unfounded.

“False reports, the Usahihi Expressway is not cancelled,” the company said. “The project is still under active review by KeNHA, the PPP Directorate, and the National Treasury.” It argued that the rejection was a technical step rather than the end of the process.

Everstrong indicated that it would challenge the tribunal’s decision in the High Court, though as of this writing, no such petition has been confirmed as having been filed.

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Observers, however, say the deeper problem lies in geopolitics. Everstrong admitted that its original partner, Portuguese builder Mota-Engil, was forced to exit after financiers objected. 

Mota-Engil has a 32 per cent shareholder in China Communications Construction Company (CCCC), the state-owned giant that built Kenya’s Standard Gauge Railway.

“Those two issues caused a little bit of friction with our lenders,” said Stanley Odhiambo of Everstrong, referring to CCCC’s stake and a tax case facing the Chinese firm. 

The financiers—mainly American, including the US Exim Bank—were unwilling to proceed while a Chinese-linked company was involved.

PPP Directorate Director-General Kefa Seda later gave a clearer picture of what went wrong. He said Everstrong brought in new contractors to fill the technical gap but never found a replacement for Mota-Engil as an equity partner.

The missing equity partner left Everstrong unable to meet the project’s financial requirements.

Everstrong turned to alternative contractors. It opened talks with India’s Larsen & Toubro, South Korea’s Samsung, Turkey’s IC Holding, and Italy’s Webuild. JP Morgan was the lead arranger for financing, with the US pushing for new partners with stronger balance sheets.

There is no indication that any of the talks resulted in a replacement partner.

The standoff reflects a larger battle between the East and the West. China has dominated Kenya’s infrastructure for two decades, while the expressway was billed as proof of America’s renewed presence. Instead, the project has become a test of which power can secure influence over East Africa’s most important trade corridor.

With Everstrong’s proposal rejected, Kenya has moved on. The Treasury’s PPP Directorate has begun procuring a transaction adviser to restructure the project by widening the existing Nairobi-Mombasa highway.

Bidding closed on May 8, 2026 and the submissions are now under evaluation.

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