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State Approves Sh550bn Nairobi-Mombasa Expressway

The project has secured initial approval for PPP-based construction.

Updated

Expressway
The road has been in the works since 2017. PHOTO | FILE

The Nairobi-Mombasa Expressway project has secured first-stage approval for construction under a public-private partnership (PPP) model, marking a significant leap forward for the long-awaited venture.

According to the National Treasury, the 473-km highway is in advanced stages of preparation after its recent approval by the PPP committee, with construction expected to cost $3.6 billion (Sh554 billion).

“The [project] is at advanced stages of preparations, having been granted first stage approval by the PPP committee recently and therefore ready to progress to the project development phase,” the Treasury says.

The mega project appeared to advance in 2017 when Kenya signed a Sh230 billion deal with American engineering firm Bechtel for the road’s construction.

The deal signing paved the way for the subsequent stage, which involved mobilizing financing from export credit agencies in the US.

Four years later, Bechtel rejected Kenya’s offer to have it build the road and recover its costs from charging motorists toll fees, saying the PPP model would cost five times more at $15 billion (Sh2.23 trillion).

According to the Parliamentary Budget Office (PBO), Bechtel wanted the State to directly fund construction of the expressway instead of adopting the toll model.

“The contractor has indicated that the country will get better value for money if the road is constructed under an EPC (Engineering, Procurement and Construction) model rather than a toll model,” the PBO said in September 2021.

A year later, in July 2022, Korean Overseas Infrastructure and Urban Development Corporation Africa (KIND) presented a feasibility study to the Kenyan government for the construction of the road under a PPP model.

RELATED: Koreans to Build ‘Sh1.5 Trillion’ Nairobi-Mombasa Expressway

KIND, which opened its fourth overseas office in Nairobi in July 2017 in pursuit of a share in Kenya’s mega projects, has now assumed control of the project.

However, Bechtel recently told the CK that it remains prepared to proceed with the project in “the most fiscally responsible way” to benefit the people of Kenya.  

Kenya is keen on utilising PPP deals as an alternative to expensive project loans. Notably, the recently completed Nairobi Expressway stands as Kenya’s inaugural road constructed under the toll fee business framework.

The 27-km elevated highway was built by China Road & Bridge Corporation using its own funds. The Chinese company is expected to manage the toll expressway for 27 years before transferring control to the Kenyan government.

Judy Mwende, a Journalism graduate from the University of Nairobi, is a seasoned writer and editor with more than a decade of practical experience covering the global construction industry.