Tenders for 10,000km roads plan to be awarded next week

The Ministry of Transport and Infrastructure will next week award the contracts for the construction of the first phase of the 10,000km road network set to boost connectivity.

Transport PS John Mosonik said on Wednesday this would set the stage for the commencement of the building of a 650km stretch in several parts of the country.

“We are going to award the contracts next week to be followed by resource mobilisation before the project kicks off towards end of April,” he told the Business Daily.

This is part of a 2,000km network earmarked for the first phase.

The government has adopted a new financing model dubbed annuity concessions in which the contractors will design, build, finance, operate and maintain the roads for some time. The Treasury will act as a guarantor for their bank loans.

Mr Mosonik said CfC Stanbic Bank and Equity Bank would provide the loans while KCB Group had also expressed interest.

Deputy President William Ruto said on Wednesday the cost of constructing roads would be reduced even as quality is maintained.

“There is no reason why a country like Australia or India can pay between Sh15-20 million per kilometre, for example, while here in Kenya we pay between Sh60-80 million per kilometre,” he said at a pre-bid conference in Nairobi.

“No way, we are not going back the way we did before.”

The Cabinet on Tuesday approved the creation of a fund from which payments to contractors would be made to fall under the custodian of a to be formed committee.

The annuity fund will initially start with Sh500 million. The government looks to spend Sh1.2 trillion on the annuity programme in a decade.

Contractors will only be paid based performance periodically (annuity) in equal instalments spread over some time, a fact Mr Ruto is hopeful would cut inflated costs and overruns.