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Economy

State to build 3,000km of roads in annuity plan

The construction of a 10,000-kilometre road network signals fresh opportunities. PHOTO | FILE
The construction of a 10,000-kilometre road network signals fresh opportunities. PHOTO | FILE 

The government will build 3,000 kilometres of road network in the first phase of an ambitious infrastructure project mooted in August that targets to construct about 10,000km of roads through annuity financing.

This is an additional 1,000km from the initial 2,000km that the State had tendered for in June, split into 29 lots.

An updated plan by the Transport and Infrastructure ministry shows that up to 3,008.78 kilometres of roads, in 45 lots, will be built or rehabilitated in phase one of the project.

Under the annuity financing model, contractors will access loans guaranteed by the State from banks, enabling them to design, construct and maintain the roads.

The Treasury will repay the loans in equal instalments (annuity) over eight years, starting from the time the road section is completed.

The projects, to be completed by 2017, are being implemented by the Kenya National Highways Authority (Kenha), Kenya Urban Roads Authority (Kura) and Kenya Rural Roads Authority (KeRRA).

KeRRA will handle some 1,941km of the total project, according to the schedule seen by the Business Daily, representing 64.5 per cent of the job. Kenha is scheduled to handle 10 lots of construction and rehabilitation works totalling 703km while Kura will tackle a network of 364.48 km.

Transport and Infrastructure secretary Philemon Kilimo Wednesday said shortlisting of firms that had expressed interest had been completed.

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