The government of President William Ruto entered into a secret Public Private Partnership (PPP Model) to finance the renovation of Bomas of Kenya. The facility is currently being renovated at a cost of Sh31.7 billion.
Up until now, the financiers behind these renovations have remained a top secret that not even the Cabinet Secretary for Tourism could speak about. According to a report that appeared in local newspaper Daily Nation, the financiers of the project shall be paid back their investment using money collected through the Tourism Fund.
The newspaper quoted the Tourism Fund Board chairman Samson Some saying that part of the fund’s collections shall go towards repayments.
“A percentage of our levy collection will be committed annually by the fund as a repayment to the people who are investing in the project,” said Some.
“The government was clear that by mobilizing private sector money, we could get this facility available to the industry immediately. Then what would happen is that this repayment would be done through collections internally from the industry.”
The facility spans over 323,500 square metres and is located near Lang’ata Road and Magadi Road.
Once complete, it will feature multiple auditoriums, a banquet hall, hotels, and a presidential hall with VVIP lounges and offices. It is also expected to accommodate over 10,000 guests, making it one of the largest conference facilities in the region.
Revelations that the project is being undertaken via a PPP model shows a trend in which the government of President William Ruto has been starting projects and committing various levy collections as guarantees.
The government has already taken loans through the securitization of the road maintenance levy (RML).
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In this securitization, the government guaranteed to use future revenues from the levy as collateral in order to access money from the capital markets. The Kenya Roads Board securitized Sh7 out of every Sh25 per litre from the RML over the next ten years.
