Industry

Kenya seeks loan from China for roads

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Road construction. The Treasury will begin talks with China for a loan to finance the Sh17.1 billion southern bypass that is intended to divert trailers from roads close to the Nairobi city centre. File

The Treasury will begin talks with China for a loan to finance the Sh17.1 billion southern bypass that is intended to divert trailers from roads close to the Nairobi city centre.

Kenya is banking on the funds to start the construction of the by-pass that was to begin three years ago.

The Kenya National Highways Authority (Kenha) director general Meshack Kidenda said the agency had concluded the design and costing phase of the project.

“We have agreed on the design and costing,” said Mr Kidenda, adding that Treasury will begin talks for Chinese funding for the project under a bilateral arrangement.

The project has attracted interest from Chinese companies already engaged in construction of bypasses in Nairobi expected to decongest the city. The southern bypass will run from St James Hospital on Mombasa Road to Kikuyu, off the Nairobi-Nakuru Highway.

Although Kenha has done the preparatory work for the project, its implementation could end up falling under another government agency—Kenya Urban Roads Authority (Kura)—depending on whether the road is classified as an urban or a transit road.

Kura has listed the southern bypass as one of its projects in the current financial year.

The agency will handle various projects in the 2011/2 fiscal year including roads in Eastleigh, Upper Hill, KWS-Gate-Langata- Bomas junction, missing links in Westlands and the southern bypass, Kura director general Joseph Nkadayo said at a press conference

Kura is in charge of the northern and eastern bypasses that are expected to be completed by the China Road and Bridge Corporation in October this year.

The southern bypass is way behind schedule following a funding hitch after it was de-linked from the Sh67 billion Nairobi Toll Road Concession Project that was to be funded by the government and the World Bank. The budget has earmarked Sh400 million for the project leaving the Treasury with the task of securing equivalent funds for the project.

The government is considering various financing options including build, operate and transfer ( BOT) or public private partnerships ( PPP) framework.

China’s Export-Import Bank (Eximbank) had in March this year signed a deal to finance the bypass road project supported by a Sh8.6 billion ($114 million) export credit guarantee from the Chinese government issued in 2008.

Ease traffic

In 2009, the government introduced urban road tolls and three bypasses to help ease traffic on the busy highways in Nairobi.

The construction of the bypasses has become more urgent amid rising number of motor vehicles causing congestion in the city and surrounding areas.

Kura says the agency has been allocated Sh6.2 billion to maintain and create new roads in Nairobi and surrounding areas while Japan has also given a grant of Sh2.2 billion towards the construction of missing links in West lands area.

“A study we did shows that 43 per cent of heavy commercial vehicles using Eastern and Northern by passes are over loaded. These include trucks ferrying sand from Machakos,” said Mr Nkadayo.