Economy
Kenya tempts China to rival France on a road worth NIS 184 billion
Monday, July 24, 2023
Artistic impression from Nairobi to Mao summit toll road. file image | Swimming pool
President William Ruto’s administration offered the Sh184 billion Mao Summit highway to Chinese investors after a fallout with the French over price, in the latest development of a controversy over financing what promises to be Kenya’s largest road project.
On Saturday, the president and other senior government officials told a Chinese delegation that doubling the 233-kilometre highway was one of the pending infrastructure projects they were up for grabs.
The Chinese have lobbied in the past to be part of the action.
is reading: Why the state has halted the Sh180bn Mau Summit highway plan
A French consortium initially won the bid. But Principal Secretary for Road Transport Joseph Mbugua revealed last month that Kenya’s Kwanzaa administration had decided to delay construction of the $1.3 billion Mau Highway.
Mbugua said the government found the overall cost of the project to be very high given the current dynamics as Kenya is in a tight fiscal space.
He revealed that the government was negotiating with contractors and financiers, in a move that will delay the start of implementing the project, which attracted financiers such as the World Bank and the African Development Fund.
We are still in negotiations. It is becoming a bit difficult for us to bear the current dynamics, so we asked them to review the presentation to see if we can make it more affordable,” said Mr. Mbugoa.
On Saturday, the government moved to entice the Chinese to join the race to build a 233-kilometre road between Nairobi-Nakuru-Mau Summit.
Dr Ruto said the Kenyan government has started bilateral talks with its Chinese counterpart on the completion of several outstanding road projects, including the 175km widening of the four-lane dual carriageway.
“We are willing to speed up discussions and finalize details on proposed projects for implementation,” the president said during a high-level meeting with Wang Yi, a member of the Communist Party’s Politburo at the Office of the Central Committee of China and director of the Office of the Central Committee for Foreign Affairs.
Dr. Ruto noted that these projects can be pursued either in the framework of public-private partnerships or between governments.
On his part, Wang noted that China will focus on areas that will help Kenya flourish.
“China will study priority areas for the Kenyan government,” he said.
Cabinet Secretary of Roads Kipchumba Morkomin also held a meeting with a Chinese delegation headed by Vice Foreign Minister Ding Lei.
“Our discussions centered on pending projects in the road and transport sectors as discussed yesterday (Saturday) with President Ruto,” Mr. Morcumen said in a tweet.
Besides the Mao summit duo, the government plans to modernize the Jomo Kenyatta International Airport (JKIA) and the ports of Mombasa and Lamu.
The French consortium of Vinci Highways SAS, Meridian Infrastructure Africa Fund and Vinci Concessions SAS has been tasked with extending the main artery from Nairobi to western Kenya into a four-lane dual carriageway through a public-private partnership (PPP) model.
The consortium, known as Rift Valley Highway Limited, was expected to recoup its investment within 30 years by charging tolls on the road.
However, the new management has not yet approved the construction of the project which was scheduled to start in September 2021.
The project, which has financial support from the World Bank and the African Development Bank, was initiated by then-President Uhuru Kenyatta.
If the Chinese win this bid, they will have built two of the country’s major roads, with China Road and Bridge Corporation (CRBC) already building the Nairobi Expressway, the largest PPP project to date.
China has set its eyes on the new public-private partnership model favored by the Kenyan Kwanzaa administration as the government runs out of fiscal space for more loans.
Although contractors have not yet embarked on the 233-kilometre route, the government has set aside Sh816 million for the purchase of land along the planned highway in the four financial years to 2025/26.
A consortium of three French companies earlier indicated it was ready to start work after receiving financial support from the African Development Bank and the World Bank.
Both contractors and financiers indicated that they were awaiting President Ruto’s word on when construction would begin.
is reading: The financiers are waiting for Roto’s nod on Mao Sumit Road
President Ruto met his French counterpart, Emmanuel Macron, on their two visits to France in January, and it is understood that road-building showed up in the bilateral talks.
France has intensified its activities outside the Francophone countries and has set its sights on Kenya as an entry point to the East African region.
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