• Under the PPP model, investors build and maintain roads and operate them for between 15 and 20 years to recoup their investments before handing over the project to the government.
• The government, through the PPP model, is trying to avoid expensive loans to fund capital-intensive projects as the country's debt hits Sh6.4 trillion.
Image: FILE
A bid by the government to mobilise Sh200 billion through public-private partnership for the financing of several projects has faced strong headwinds.
The Motorists Association of Kenya (MAK) has opposed the tolls set to be imposed on the use of at least five highways in the country.
Under the PPP model, investors build and maintain roads and operate them for between 15 and 20 years to recoup their investments before handing over projects to the government.
The proposed tolling has, however, not resonated with some sector players, as the Sh18 road levy charged on every litre of fuel will still be applicable.
Tolls were introduced in the country in the 1980s but scrapped in the 1990s, before being replaced by road maintenance levy. However, in the wake of a burgeoning debt that has already hit Sh6.4 trillion, the government, through the PPP model, is trying to avoid expensive loans in funding capital-intensive projects.
While presenting the 2020-21 budget last Thursday, Treasury CS Ukur Yatani said that the loan-ridden government was banking on the PPP model to finance several projects that are currently at an advanced stage of negotiations.
"As an alternative source of finance to fund public projects, the government shall revitalise the Public-Private Partnership framework. Indeed, public-private partnerships have the potential to accelerate economic growth and development by crowding in private sector participation in the financing of capital-intensive infrastructural projects,” Yatani said in Parliament.
The CS said reforms in the area will include amending the PPP Act to remove unnecessary approvals and redundant processes, as well as restructure and strengthen institutions responsible for implementing such projects.
The government will also streamline and standardise the appropriate credit enhancement tools, including the government letter of support, partial risk guarantees and indemnity guarantees, as well as viability gap funding, where necessary, to enhance bankability of projects.
The projects targeted under the plan are drawn from, among other sectors, transport, energy, health, housing and manufacturing.
Yatani allocated massive resources for ongoing road construction, rehabilitation and maintenance and design of roads and bridges. This included Sh92 billion for ongoing road construction, Sh31.6 billion for rehabilitation, Sh61.8 billion for maintenance, and Sh1 billion for designing roads and bridges.
The state is banking on the private sector to build and operate at least five major roads across the country, a move aimed at improving the infrastructure and maintaining them without burdening the government with expensive loans.
Those that will attract tolls include the Nairobi-Nakuru highway, the Nairobi-Mombasa highway, Thika Superhighway, Nairobi’s Southern Bypass and the JKIA-Westlands Expressway.
Transport CS James Macharia last week said the JKIA-Westlands Expressway would attract a Sh300 fee. Those not interested in using the new road will, however, use the old road that will be beneath the expressway.
In March, the National Assembly urged the Transport ministry, the National Treasury and the Attorney General to table a bill that would guide the implementation of tolls on major roads.
But motorists on Monday said they will not accept tolling of roads. Association chairperson Peter Murima told the Star on the phone that they have already started collecting signatures.
Some 100,000 motorists have renewed their membership to the association. However, the petition has attracted interest from far and wide, with 700,000 motorists having signed.
The MAK is a registered umbrella advocacy group that brings together drivers and vehicle owners. It champions and lobbies for best transport practice.
Murima said the petition, once ready, will be submitted to Treasury and Transport ministries. He said targetted roads are public and had been built using money from the public coffers, hence must not be "privatised".
"This is a contravention of freedom of movement,” he said.
Murima said the JKIA-Westlands Expressway is being constructed on public space as the private entity building it did not buy the space.
“The privatisation of public road will restrict movement and [amounts to] abuse of Kenyans' intelligence,” he said.
Edited by F'Orieny