The project began in 2009 following the award of the tender to China Road and Bridge.
The first three berths in the port of Lamu will be completed in three years.
This marks the start of the process of construction of the much awaited bypass.
The security system is jointly funded by the World Bank and the Kenyan government.
Experts say the project is likely to destroy the environment, especially mangrove plantations.
17 companies had tendered for the project by the October 12 deadline.
The 2,000-km pipeline will be built at a cost of US$3 billion.
Installation of the security system is set for completion in March next year.
The highway was split into three sections for construction works.
The project begins with building the first three of 32 planned berths at Manda Bay.
Safety fears grow as unqualified builders replace qualified engineers.
NPDMS has done little to fix a process still riddled with inefficiencies and abuse.
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