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The Nairobi-Mombasa Expressway will be completed in ten sections in six years
Almost a year after Kenya signed an agreement with the American engineering firm Bechtel for the construction of a fast track between Nairobi and Mombasa, the two sides still have to hear about how to finance the project despite a series of high-level talks.
On the one hand, the Kenyan government wants the 473-kilometer Nairobi-Mombasa Expressway to be completed by the Public-Private Partnership (PPP) model where private investors will build and operate the Installation for up to 25 years – by charging tolls – to recover their investments and margins.
On the other hand, Bechtel International opposes the PPP model which, according to him, will cost the Kenyan taxpayer $ 540 billion over the next 25 years.
The company has therefore urged Kenya to undertake the project under an engineering, procurement, construction and commissioning (EPCC) contract.
According to the EPCC model, a contractor is required to deliver a complete installation to a developer who has only to turn a key to start operating the facility; therefore, such agreements are sometimes referred to as turnkey construction contracts.
But the government, concerned about the rapid increase in public debt, has taken a stand. According to James Macharia, Secretary for Transport and Infrastructure, the state has opted for the PPP model, with the understanding that this would be the least expensive option for taxpayers.
"We do not want to get into more debt if the private sector can do the work." The National Treasury team, through the PPP unit and their advisers, did the calculations, and the preference is for the PPP option, "Mr. Macharia said in a recent interview.
The financial stalemate threatening to put an end to the project, based on a recommendation by PricewaterhouseCoopers (PwC), mandated to conduct the feasibility study in February 2015, is the subject of 39, a meeting between President Uhuru Kenyatta and the United States. officials last week.
READ: US firm wins contract to build Kenya's first high-speed highway
At the meeting it was decided that both parties would continue discussions on the project with finer details expected when A Kenyan team visits the United States in October.
To speed up discussions, Bechtel leaders are expected in Nairobi on July 9 for a meeting with officials from the National Treasury, the Kenya National Highway Authority (KeNHA) and other key agencies .
"We will begin a detailed discussion on how the funding approach will be undertaken as part of this project, discuss modalities, funding structure and details so that we are clear on how to undertake this project, "said Treasury Secretary Henry Rotich on Tuesday.
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