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State questions Sh300bn costing of Nairobi-Mombasa expressway

In Summary

• It has emerged that the project would cost approximately $1.8billion (Sh184.6billion ) a 66.7 per cent difference from the Sh300 billion.

• Transport CS Macharia said the country has no contractual commitment to the project, hence no costs can be linked to the multi-billion highway.

Image of the said Nairobi-Mombasa expressway
Image of the said Nairobi-Mombasa expressway
Image: COURTESY

The Transport Ministry has rejected the US$3billion(Sh307.6 billion) price tag on the Nairobi-Mombasa expressway project as it emerged that the costing was inflated.

The 485-kilometre mega project is yet to kick off despite the ground breaking set for June.

It has emerged that the project would cost approximately $1.8billion (Sh184.6billion ) 66.7 per cent less compared to the Sh300 billion earlier quoted. 

 

The project has since been put on hold with the US ambassador Kyle McCarter saying the government was scrutinising the proposal to establish if it offered value for money for Kenyans.

Last August, President Uhuru Kenyatta signed a deal with US President Donald Trump during his visit to the White House,which opened talks for funding of the project with a proposed credit line from the US Exim Bank.

Transport Cabinet Secretary James Macharia yesterday said the country has no contractual commitment to the project, hence no costs can be linked to the multi-billion highway.

“As of now, we do not have any contractual commitments to do the said Express Highway,” Macharia told the Star after an inquiry.

“How can we talk about figures for a non existent transaction?,” he further posed.

Earlier, McCarter had said the cost is questionable moreso at a time when the country is struggling with a piling debt.

Central Bank data shows that as at March, Kenya’s public debt stood at Sh5.43 trillion comprising Sh2.7 trillion domestic and Sh2.73 trillion external debt.

 
 

The Kenya-US deal deal for the construction of the expressway would increase the country’s debt obligation to Sh5.73 trillion without taking into account the Sh577 billion the government intends to borrow to bridge its financing gap for the 2019/20 financial year.

“We are still working on the finance. Kenya has a challenge of debt and we are wary of burdening Kenyans” McCarter told a Kisumu-based vernacular radio station during an interview in May.

According to the envoy, the US is keen not to commit to a project whose cost would turn out to be “three to four times higher than the actual”, saying the Trump administration wants to ensure there is an honest return on investment, to Kenyans.

In an opinion piece published in local dailies, the ambassador said the highway should provide real value for Kenya.

“At a cost half the price of rail and roads previously built, the highway will be built in segments , leveraging private investors to minimise government debt,” he wrote.

US construction company-Bechtel is contacted to build the project estimated to create 500 jobs and involve local businesses supplying up to 100,000 tonnes of cement and 40,000 tonnes of steel.

The Star has also established the Environmental Impact Assessment on the project was never completed despite having been established in 2018.

There is also no detailed design on the project despite a stakeholders engagement on “affected persons” being conducted, meaning the process has to begin afresh despite hundreds of thousands having already been spent on the initial stages.

“Fresh consultations will be required which will inform compensation for affected persons. Currently we cant even say who will be affected because the route has not been decided,” a source familiar with the process told the Star.

This however contradicts the Kenya National Highways Authority (KeNHA) which according to director general Peter Mundinia maintains there is land for the project.

“Land had been identified along the old alignment but issues arose over bringing down a lot of facilities along the road. We have now found land fully off Mombasa road,” he told the Star.

He said the government is however looking to undertake the project as a Public-Private Partnership to avoid piling up public debt.

“After the whole issue of saying the debt is too high, we now have to approach the project as a PPP rather than the government borrowing more with our already burgeoning debt,” Mundinia said.

Construction of the expressway was expected to begin at the Jomo Kenyatta International Airport (JKIA) along the existing Nairobi-Mombasa highway.

The proposed road will be a dual-carriage motorway with four lanes to ease congestion and cut travel time between the two cities from the current 10 to about four hours.