Kenya is set to complete its first annuity road this year after nearly one decade of false starts, easing demand for foreign debt.
The annuity financing model allows private contractors to design, build and maintain public roads using their own resources with the Treasury reimbursing lenders at uniform rate for cash advanced for the projects.
Transport Secretary James Macharia said the 91km road project in Kajiado County will be opened for use before the year ends.
The State had planned to build 10,000km of paved roads under the annuity model and laid out plans to raise the reimbursement cash from the fuel levy.
At one point, however, the Roads ministry threatened to drop the model, citing inflated costs and the slow pace of project approvals.
On Wednesday, Mr Macharia said the road in Kajiado, comprising 48km through Ngong, Kiserian and Isinya townships, and joining the 43km Kajiado-Imaroro road, will serve industrial establishments, colleges and homes.
“We have tarmacked 8,000 kilometres and on the way to fulfilling the 10,000 kilometre pledge made in 2013 and that will be achieved within the next two years,” he said.
The annuity model also reduces Kenya’s reliance on foreign loans to fund projects, thereby easing public debt standing at Sh6.3 trillion as at end of March.
Mr Macharia said the planned expansion of the Nairobi-Mombasa highway was also lined up under the public private partnerships where users will pay toll.
The Treasury has lined up 80 projects worth Sh1.1 trillion to be executed via the PPP model cutting across sectors with the bulk in transport and infrastructure, energy, health and education.
The projects include projects for second Nyali Bridge, Nairobi-Nakuru-Mau-Sumit road as well as maintenance of Thika Road, Nairobi Southern Bypass and Nairobi-Mombasa highway.