The construction of the first 2,000km of the rural roads, which is set to begin this fiscal year, will consume 60,000 tonnes of cement, 15,000 tonnes of lime and 80 million litres of bitumen.
Official data shows cement consumption stood at 5.05 million tonnes last year against a production level of five million tonnes.
Steel and iron producers are also expected to benefit from this initial project, which is expected to cost Sh52 billion out of the projected Sh260 billion.
Cement firms top the list of beneficiaries of a plan by the State to build a 10,000km road network to open up remote areas in the next three years.
Officials estimate that the construction of the first 2,000km of the rural roads, which is set to begin this fiscal year, will consume 60,000 tonnes of cement, 15,000 tonnes of lime and 80 million litres of bitumen.
Steel and iron producers are also expected to benefit from this initial project, which is expected to cost Sh52 billion out of the projected Sh260 billion.
“It will take high level contractors to manage about 30 major contracts packaged in lots, and about 400 other smaller contracts,” the Kenya Rural Roads Authority director general Mwangi Maingi told a planning workshop in Nairobi on Wednesday.
The project is set to buoy local cement firms to expand their capacity to meeting the increased demand.
Official data shows cement consumption stood at 5.05 million tonnes last year against a production level of five million tonnes.
On Wednesday, officials said the government will not pay contractors upfront but will make payments periodically after the project has started, with the assurance that quality standards have been met.
President Uhuru Kenyatta endorsed the adoption of the annuity financing model where contractors will borrow money from banks to implement projects with the Treasury acting as a guarantor. The Treasury will repay the loans over eight years.
Under the model, a contractor will design, construct, finance and maintain the road for 10 years before handing it over to the State.
This is aimed at improving efficiency among contractors while ensuring availability of funds to prevent time and cost overruns experienced in the past.
“The annuity financing framework will focus on value for every shilling and ensure performance and generation of synergies among stakeholders,” Mr Kenyatta said.
He asked the private sector to take up infrastructure projects to complement the government’s development agenda, saying his administration was banking on increased inter-connectivity to boost growth in remote areas and ease the cost of doing business.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
