Kenya plans to privatize the construction and maintenance of some key road highways in next two years, officials said on Monday.
Principal Secretary in the Ministry of Transport and Infrastructure John Mosonik told an infrastructure forum in Nairobi that the government has already hired transaction advisers for first three major road projects.
“The consultants will guide on the best way to involve the private sector in financing the capital intensive infrastructure projects,” Mosonik said during a consultative meeting on the projects that will be undertaken via Public Private Partnerships (PPP) in the ministry of transport.
The one day event brought policy makers and the private sector to develop appropriate ways to improve the country’s road network.
The World Bank has provided financing assistance to Kenya for the procurement of the transaction advisers.
The transaction advisers will help in the preparation of a transaction plan and bid documents so as to assist the government to identify the most qualified private sector play to undertake PPP projects.
One of the three road projects earmarked for privatization is the 485 kilometers Mombasa-Nairobi highway.
The ministry of transport is looking for a private sector player to finance the construction of a dual carriage way on the highway.
Mosonik said the private sector will recoup its investments by charging a toll fee on all road users for a period of between 20 to 30 years and thereafter handover the road to the government.
Mosonik added that the part of the Trans African Highway that runs from Nairobi to Nakuru will also be privatized.
“We are looking for a private investor to maintain and operate the 176 km road by charging road users a toll fee,” he said.
According to the PS, the highway may also need capacity augmentation to four lanes depending on traffic.
“Road accidents are also a major issue and so the private operator will need to enhance road safety features of the highway, ” he said.
The government official noted that the transaction advisers will complete feasibility and environmental impact assessment reports on three identified road networks in the next six months.
National Treasury Director of PPP Unit Stanley Kamau said that the government will this week gazette regulations that will provide a framework for the payment for road projects which are built under the annuities program.
He added that so far the government has approved over 69 projects under the PPP framework.
Kamau added that the government is privatizing the maintenance and construction of roads in order to leverage private sector finance.
He noted Kenya faces a two billion U.S. dollars infrastructure financing gap annually while the government is only able to set aside 22 million dollars every year for road maintenance.
The director said the government will use the PPP framework for the construction and management of high traffic roads and the annuity financing model for the construction of rural roads
Kenya National Highway Authority (KenHa) Acting Director General Linus Tonui said only nine percent of Kenya’s road network is paved.
“The government is implementing measures to tarmac at least 10, 000 kilometers within the next five years,” Tonui said. Enditem