Kenyatta heads to France to sign U.S.$1,7 billion loan

President Uhuru Kenyatta is expected to leave for Paris tomorrow, where he will take billions of shillings in debt for a road project.

The Head of State is scheduled to sign a public private partnership (PPP) deal worth Sh180 billion for dualling of the 190-kilometer Rironi-Nakuru-Mau Summit Road.

This will be the President’s first trip post Covid-19 pandemic, which saw the Kenyan airspace closed for both domestic and international flights.

The Nation understands that the President will meet his French counterpart Emmanuel Macron at the Élysée Palace in Paris, where they will sign and preside over the inking of several PPP agreements on water, infrastructure and energy. Mr Macron was in Nairobi in March last year on a State visit.

Kenya’s signing of the tolling concession pact with a consortium of French firms under Rift Valley Connect led by Meridiam Infrastructure Africa Fund will unlock the funding of the road, which once complete will be the country’s first toll highway outside Nairobi.

The road, a key segment of the Northern Corridor, is expected to significantly cut the travel time for both people and goods, reducing the cost of doing business. It will also compliment the standard gauge railway (SGR) services between Naivasha and Malaba Border.

Awarded tender

Last year, the Kenya National Highways Authority (KeNHA) awarded the tender for the road to French firm Meridiam International, with others in the consortium including Vinci Highways SAS and Vinci Concessions SA.

The project is expected to be undertaken on a PPP basis that will see the consortium raise finances for the road, design, construct, maintain and operate the road on pre-agreed standards and specifications.

Sources told the Nation that a tolling fund is expected to be established later this year.

“The modalities of the agreement, or of the establishment of the tolling fund are not known yet,” a source with knowledge of the matter said.

Efforts to get a clarification over the matter from Transport Cabinet Secretary James Macharia were futile as he was unavailable on phone.

But in an earlier interview, Mr Macharia told the Nation that the Cabinet had decided to prioritise two PPP’s project in order to ease the nightmare for users between Jomo Kenyatta International Airport and Westlands, and those who use the Nairobi-Naivasha-Nakuru highway.

“We decided to give priority to two Public Private Partnership projects,” he said.

Under the PPP model, investors are expected to raise finances for the two road projects and design, construct, maintain and operate them on pre-agreed standards and specifications. The concession for both roads has been capped at 30 years.

Last year, KeNHA’s Director-General Peter Mundinia said the contractor will be expected to recover their funds from the road through a user fees (tolls), after designing, building, and maintaining it within the agreed time-frame. It is also understood that the contractor will be granted the operation and maintenance of the Southern Bypass, including the Gitaru to Rironi segment within Kiambu County.

As per the contract, the Rironi-Mau Summit project will see the contractor expand the 175 kilometres between Rironi in Limuru to Mau Summit in Nakuru County into a four-lane dual carriageway.

It will also entail the re-carpeting of Rironi-Mai Mahiu- Naivasha road.

Sh59 billion

This will be the second road the country has signed PPP on after it handed over the Sh59 billion JKIA-Westland’s Expressway to China Road and Bridge Corporation.

The road, which is currently under construction, will also entail a toll station to allow for the contractor to recoup their investment. It is expected to be complete by the end of next year.

In October last year, Kenya suspended the construction of the Sh300 billion Nairobi-Mombasa expressway for two years over the country’s debt concerns.

It would have been Kenya’s first expressway and the largest single-contract road project.

The project, modelled to complement the Sh327 billion SGR, was to be undertaken by Bechtel, a US-based private construction conglomerate.

The company won the multibillion-shilling contract in a government-to-government deal that formed part of President Kenyatta’s discussions with President Donald Trump during his US visit in 2018.

Mr Macharia said the Cabinet had decided to suspend the project for at least two years to allow the country’s debt levels to drop, while also prioritising other key projects.

Source: nation.africa