President Uhuru’s visit to Beijing has seen Kenya obtain several Public-Private partnerships (PPPs) deals with Chinese private investors worth billions of shillings. One of these deals entails a commitment by Chinese private investors to support the construction of the 30-kilometre expressway from the Jomo Kenyatta International Airport (JKIA) to Westlands.
The Cabinet Secretary of Transport James Macharia, who was with the President in Beijing, noted that unlike the standard gauge railway that is being constructed with debt financing, the new deals are under PPPs thereby cushioning Kenya from further escalation of the public debt.
“The money is not coming from debt; it is coming from the private sector because that road is commercially viable. What will happen is [the investors] will do the tolling and after the money has been recovered, the road will shift back to the government,” he said.
Other Upcoming Investments Under PPPs
Other projects that the Chinese investors will finance through PPPs include the construction of the Dongo Kundu industrial Special Economic Zone in Mombasa and the development of the Modogashe-Habaswein-Samatar and Elwak-Rhamu roads. The North Eastern roads will cost Sh15 billion and will be constructed under the government’s roads annuity program.
“The new partnerships are seen as a quick result of Kenya’s desire to shift away from pure debt financing with the new emphasis being placed on Public-Private Partnerships and the need to explore innovative off-balance sheet financing for the country’s infrastructure needs,” a statement from the President’s office reads in part.
The new upcoming deals come shortly after President Uhuru received a pledge from the US government to financially support the construction of the Nairobi-Mombasa expressway.
In China, President Uhuru signed an agreement for the construction of the Western Bypass and an agreement on the Economic and Investment Cooperation where Kenya will get a grant of Sh4.5 billion “to guide the discussion and implementation of projects that involve both nations.”
SGR Financing
CS Macharia said the Chinese government will support the remaining phases of the SGR but on condition that the Kenyan government will conduct a feasibility study of the entire project from Mombasa to Kisumu to determine its commercial viability. The remaining part of the project is expected to be expensive due to the terrain.