The Kenya National Highways Authority (KeNHA) has come out to clarify that the consortium led by China firm China Road and Bridge Corporation (CRBC) and the National Social Security Fund (NSSF) has not yet been approved to start working on the Nairobi-Mau Summit toll highway.
According to KeNHA, the National Treasury’s Public-Private Partnership Committee only nominated the consortium as the preferred contractor, paving the way for KeNHA to start negotiations on how the implementation would be done and the associated terms and costs.
“The PPP Committee has not yet approved the award for implementation of the project. The concurrence granted only allows KeNHA to commence negotiations with the preferred proponent in line with the PPP process. This is the process that is currently ongoing,” said KeNHA.
The national highways body further revealed that it had received three proposals on the highway before it settled on the Chinese consortium. The three proposals for the design, build, finance, operate, maintain and transfer of the highway A8 and A8 South were all privately initiated proposals (PIPs).
The proposals were submitted by Shandong Hi-Speed Road & Bridge International Engineering Co. Ltd, CRBC and NSSF, and Multiplex Partners Company Limited which is a Burundi-registered infrastructure project development financing firm.
However, Multiplex failed to pay the mandatory non-refundable proposal review fee when submitting its proposal and the proposal was dismissed on August 1 by KeNHA due non-compliance.
Early projections show that if the Consortium goes on to implement the project, it will earn an operating profit of USD2.63 billion equivalent to about Sh339.8 billion. These earnings will be corrected over the 30-year period that they will operate the road charging a minimum toll of Sh8 per kilometre.
The total revenues will come in at around USD4.88 billion which is equivalent to about Sh630.3 billion against total costs of about USD2.25 billion which is about Sh290.5 billion.
The Rironi-Mau Summit toll road project costs include about USD1.49 billion (equivalent to around Sh193.4 billion) of capital expenditure and USD753.8 million (equivalent to around Sh97.6 billion) of the highway’s life cycle operations costs and routine maintenance and periodic rehabilitation.
The projected costs will cover the 175 kilometre stretch from Nairobi to Nakuru to Mau Summit known as A8, and the 56-kilometre stretch known as A8 South from Nairobi to Mai Mahiu to Naivasha.
