Editorials

Transparency needed in PPP infrastructure projects

Nairobi Expressway

Nairobi Expressway under construction. PHOTO | LUCY WANJIRU | NMG

The Treasury has made a rather troubling revelation of how much money Kenya risks paying as penalty if it terminates contracts with private firms that are building roads and solar plants under the public-private partnership (PPP) agreement.

Sh158.8 billion is no little money for a government that is struggling to meet countless obligations.

There is no doubt that to rebuild and retool Kenya’s infrastructure for economic growth, PPPs remain a viable route.

But it is equally important that the government fully involves the public. Lack of public engagement means that most Kenyans will shun the projects, especially if they are required to pay for usage.

For instance, the China Road and Bridge Corporation, which is constructing the Nairobi Expressway, is expected to earn from charging user fees like toll charges for between 10 and 30 years. But how many Kenyans will pay to use the road?

A parliamentary advisory has already raised concerns that the inadequate disclosures on tolling of the Nairobi Expressway could result in public resistance, disrupting government plans to have the Chinese contractor recover costs from charging motorists using the road.

Case studies from privatised toll roads globally have shown difficulty in meeting revenue targets.

If Kenya is to generate the badly needed cash for the private firms, it must align its citizens’ needs to match with its rosy projections.

Transparency in the details of the PPP contracts increases public confidence in projects, achieves better value for money, reduces the risk of corruption, and even ensures the government finds it easier to mobilise more private capital for investment. Disclosures will shed light on the “fine-print” clauses, making it hard for public officials to make decisions to advance their own good.

The government is already looking to develop more ports, road, rail, power transmission, health, housing, water and sanitation, and the blue economy projects using PPPs.

The public must be made aware of these deals and the terms must be met to avoid exposure to penalties.