Planned Nairobi- Mombasa Expressway gets first approval at cost of KSh555.09 billion
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The 473-kilometre Nairobi-Mombasa Expressway receives the first-stage approval for construction under a public-private partnership model
The 473-kilometre Nairobi-Mombasa Expressway receives the first-stage approval for construction under a public-private partnership model.
The Nairobi-Mombasa Expressway, which is a 473-kilometer project, has been approved for construction under a public-private partnership model, according to the Treasury.
This clearance allows the project to move forward to the development phase.
According to the Treasury, the project is anticipated to cost roughly $3.6 billion (Sh555.09 billion) and aims to relieve severe traffic between the two cities.
“Mobilisation of private sector resources to develop and expand key trunk networks in the country, such as the Mombasa-Nairobi Expressway, which is at advanced stages of preparations, having been granted first stage approval by the PPP [Public-Private-Partnership] committee recently and therefore ready to progress to the project development phase. Estimated cost is $3.6 billion,” it said.
The multibillion-shilling Nairobi-Mombasa Expressway project had previously caught the attention of US capital investment company Everstrong Capital, American firm Bechtel Executive, and Korean Overseas Infrastructure and Development Corporation (KIND).
In 2018, the project’s expected cost was set at approximately Sh300 billion.
The government had reached a deal with Betchel in 2018, but it never went further owing to disagreements over how to pay for the project’s construction.
According to a 2021 Parliamentary Budget Office (PBO) study, the US company turned down Kenya’s proposal to build the road and collect the necessary funds from toll-paying motorists.
The PBO, which advises lawmakers on the economy and budget, said Bechtel had settled on a model where the State pays it for building the road instead of recovering its money through user fees.
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Sources at the Kenya National Highways Authority (KeNHA) said the US firm also demanded a virgin land corridor for the project—a request that the State was uncomfortable with since it would require costly acquisition of land.
“The request for virgin land was contested because KeNHa already has a sufficient reserve on the current road corridor, and it wouldn’t make sense to buy fresh land for the road project,” a State official said.
In the initial plan, motorists were expected to pay toll charges for using the planned road. The BPO cited a study by the Inter-America Development Bank that showed a road is likely to be a viable candidate for construction through the toll model if it has a flow exceeding 5,000 vehicles per day unless the government offers a substantial subsidy to the contractor.
“This limits the number of roads that can be undertaken by the model in Kenya to a few sections of the main transport corridors. Along the A8 (Malaba – Eldoret – Nakuru – Nairobi – Voi – Mombasa) road, the Nairobi Expressway has so far proved to be a viable section for tolling while the Mombasa – Nairobi Expressway has proved difficult,” PBO said.
“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,” it added in its 2021 report.
Bechtel argued that the alternative PPP model where the contractor sources for funds would cost five times more at $15 billion (Sh2.23 trillion) and take much longer to complete.
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