Companies

TransCentury wins State road contracts deal with French firm

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Kenya National Highways Authority (KeNHA) director-general Peter Mundinia. PHOTO | FILE

TransCentury is among firms short-listed to build roads under the public private partnership (PPP), which will see the Nairobi Securities Exchange-listed company participate in the multi-billion shilling projects.

The company has been selected together with France’s Eiffage SA, the lead partner in the consortium.

They were among several other firms pre-qualified to build roads including Sinohydro Corporation Limited (China), SBI International Holdings AG (Switzerland) and a consortium formed by Sogea Satom (France), H. Young and Gibb Africa Limited.

“Notice is given to interested persons that the following four firms/consortia have been short-listed for the development of roads under the repackaged Lot 6,” reads part of the Kenya gazette notice signed by Kenya National Highways Authority director-general Peter Mundinia.

The Public Private Partnership Committee — a government outfit composed of several bureaucrats including principal secretaries of lands, transport and energy — picked the companies.

The short-listed companies are expected to raise funds for roads construction next year, with the firms set to recoup their investment over years from road tolls planned on several roads.

The government plans to introduce tolling on the Nairobi-Mombasa highway, the Nairobi-Nakuru-Mau Summit highway, Thika Road, Nairobi’s Southern Bypass and a second Nyali bridge in Mombasa.

TransCentury undertakes roads construction through its subsidiary Civicon Limited whose contracts have been concentrated in South Sudan and the Democratic Republic of Congo.

The scale of the contract that could be awarded to the TransCentury consortium is not clear, but the group is expected to build a substantial part of the 10,000 kilometres new roads target.

The government is investing heavily to maintain existing roads and build new ones in Nairobi, Kisumu, Mombasa and Nakuru, among other regions.

Tolling proposal

Rollout of the projects will depend on how fast the government moves to award the contracts and devise means of funding them including a tolling proposal which has proved controversial.

“Under the timelines presented by the transaction advisors, projects would all reach financial closure by the middle of 2017,” the World Bank commented on the roads project for which it is providing technical support.

“This, however, depends not just on the approval of the tolling policy, currently at Cabinet for endorsement, associated details of technical implementation on different roads country-wide, but also rapid decisions from the government on the structuring of the project, land acquisition as well as the ability of the private sector to assemble a financing package.”

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For TransCentury, the potential contracts could give it a significant boost as it seeks to pay down debt and grow earnings in the coming years.

The company recently moved to resolve its Sh8 billion debt by getting bondholders to write off Sh4 billion and paying them Sh2 billion provided by New York-based private equity firm Kuramo Capital which has been allotted a 25 per cent stake in the company.