Annuity roads plan back on track


The government has revived the annuity roads financing programme that was shelved in May over inflated costs and the slow pace of project approvals.
Transport Cabinet Secretary James Macharia said the framework will complement the ministry’s low volume seal roads project in rural areas which is funded through the national budget.
The ministry, the CS said, can longer “survive” on Treasury’s limited budget to expand the country’s infrastructure and will welcome private contractors to design, build and maintain public roads using their own funds as stipulated in the annuity model.
A payment modality will then be agreed upon between the National Treasury, contractor and participating commercial banks.
Treasury is then supposed to reimburse lenders at a uniform rate over an agreed period of time. The commissioning of the 91-kilometre Ngong – Kiserian – Isinya and Kajiado – Imaroro Road, the first to be constructed using the model at a cost of Sh11 billion, will be done in two weeks.

Intex Construction Company will construct and maintain the project that will take three years before completion.

The cost will be about Sh120 million per kilometre according to Mr Macharia. “Being the first road under the model, we will closely monitor the progress because it will be template for other roads coming up,” the CS said.

Also to be undertaken using the model is the planned expansion of the Nairobi-Mombasa road into a six-lane super-highway through Public Private Partnership (PPP).
“Road construction will now be accelerated because we will not be solely depending on the annual budget from Treasury. With this kind of commitment, Kenyans will see more of roads done in the highest standards possible,” Mr Macharia said.


I saw the brief of Saturday but I didn’t want to post it here then. Maybe kesho. Banks were offering Intex very expensive rates that Treasury couldn’t meet in paying back to Intex. However it seems to have been resolved.

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This is good news, happy the parties have come to an understanding

Be ready for inflated road construction costs.

120m for a terrain that is mostly flat with minimum relocation of services is a total ripoff, ama ni 8 lanes? me thinks for an average road it should never go beyond 50m per kilometre