• Under the agreement, 80 kilometers of urban road network in 10 counties will be constructed and maintained for a period of 10 years.
• The project is set to cost the government Sh 7.441 billion for lot 15 and Sh 5.838 billion for lot 18 drawn from annuity fund.
Difficulties in meeting loan obligations has forced the government to prefer the private sector in the construction and maintenance of a multi-billion shilling road project.
The Kenya Urban Roads Authority on Friday signed two Public Private Partnership Project agreements.
The agreements were signed at Transport Ministry's offices between consortium of Lee Construction Limited, Cape Consult Limited and Mota-Engil Engeharia E Construcao Africa.
The agreement will see 80km of urban roads in 10 counties constructed and maintained for a period of 10 years. The roads are in Western and Central regions.
Transport CS James Macharia, Infrastructure PS Julius Korir, Kura acting Director General Silas Kinoti and Kura board members were present.
Macharia said the move ensures maximum utilisation of funds.
He said single annuity project starting from Ngong to Kiserian-Isinya-Kajiado is doing well.
"Unlike projects funded by the government, this one does not have any issues in terms of availability of funds. The project is 57 per cent complete," Macharia said.
The CS said by the time partners get money from financial systems, they undergo a lot of appraisals on their balance sheets and track records.
The CS said construction of the two lots would have put Treasury under pressure.
"That is not a chicken bill, that is a lot of money if you go to the Treasury," he said.
Macharia said another PPP has been signed between consortium of French firms for the Nairobi-Nakuru-Mau Summit road which is about 170km.
"There is no way we can manage to do this through our budgetary allocations," he said adding more proposals were coming.
Kinoti said the project is set to cost the government Sh7.441 billion for lot 15 and Sh5.838 billion for lot 18.
Lot 15 covers Central and Eastern counties and is 45 kilometers.
The project in Nyeri covers Riamukurwe-Gatitu road, Munungaine-Nyeri UCB4.
In Kirinyaga, the project covers Kutus-Kiarie -Kithiriti road.
In Murang'a, the project covers Murang'a-Muchungucha-Kiangange road , Murang'a-Ndikwe-Kiria road off Murang'a -Mugoiri road.
In Tharaka Nithi, the project covers Kanjuki-Kathwana(Makutano) road while in Embu, it covers Muthathari-Kimangaru road, Majimbo-Karurini roads.
In Laikipia, road covered include Industrial Area road and upper Muthaiga road.
Lot 18 is in Western region covers 35km.
In Kakamega, the project covers Kakamega-Ilesi and Lutonyi-Kakamega roads. In Vihiga County, it covers Chavakali-Munoywa-Kiritu roads.
In Bungoma, the project covers Mateka-Samoia and Mateka-Mwandia-Siritanyi roads.
The road from Busia junction to Alupe will also be built.
Kinoti said the signing of the agreement marks attainment of a commercial close, a key milestone in Public Private Partnership.
"It paves way for the service providers to mobilise necessary financing required for the project, thereby facilitating the attainment of financial close prior to commencement of construction works," he said.
The roads are being developed under roads annuity programme approved by the Cabinet on March 10, 2015.
Funds are raised by those with vehicles through fuel levy.
The objective of the programme is to develop and rehabilitate 10,000 kilometers of roads across the country by procuring long term contracts for the design, finance, construction and maintenance.
Periodic annuity payments to the service provider will be made from roads annuity fund established under roads annuity funds regulations of 2015.
Kinoti said he is confident that the two lots will result in greater economic benefits to urban centers.