Kenya Compensates French Firms KSh 6b Following Nairobi-Mau Summit Toll Road Contract Cancellation
- President William Ruto's administration cancelled the contract for the construction of the Nairobi-Nakuru-Mau Summit toll road
- A Chinese contractor is expected to be awarded the project in a review, which is likely to anger France, the country that mediated the agreement in Paris in 2020
- The government cited high toll fees for cancelling the tender, which was approved during the tenure of retired president Uhuru Kenyatta
Japhet Ruto, a journalist at TUKO.co.ke, has over eight years of expertise in finance, business, and technology journalism in Kenya and globally.
Kenya will compensate a consortium of French contractors a whopping KSh 6.2 billion following the cancellation of the Nairobi-Nakuru-Mau Summit toll road contract.
Source: Facebook
Why Kenya cancelled Nairobi-Mau Summit contract
This will add to the financial burden on taxpayers, increasing the financial burden they must bear for cancelled projects.
The National Treasury revealed that the termination expenses would be settled by the end of the current fiscal year in June.
Business Daily reported that the KSh 190 billion highway expansion agreement with the Meridian Infrastructure Africa Fund, Vinci Concessions SAS, and Vinci Highways SAS consortium was terminated by the government due to high toll fees, among other reasons.
Which company will take over the project?
According to Construction Kenya, the project was supposed to be financed by the Vinci Group, loans from the African Development Bank (AfDB), and guarantees from the World Bank.
The three French companies that emerged as winners in the 2018 Kenya National Highways Authority (KeNHA) procurement said they were prepared to begin construction after securing funding.
Source: Twitter
It was expected that the consortium would recover its investments in 30 years by imposing tolls on the route.
Instead, a Chinese contractor is anticipated to be awarded the project in a review that is likely to enrage France, which mediated the agreement in Paris in 2020 when retired president Uhuru Kenyatta visited the European country.
What were the proposed toll fees?
The road project was planned to decongest the key route from Nairobi to western Kenya and the neighbouring nations of Uganda, Rwanda, and the Democratic Republic of the Congo (DRC).
Chris Kirigua, the former director-general of the Treasury's Public Private Partnership (PPP) Directorate, disclosed that motorists could have spent $6 (KSh 774.77) for a small car to travel 175 kilometres and about $50 (KSh 6,456) for a truck over the same distance.
The cancellation was made following a challenge from Technica Y Proyectos, a Spanish company that had also submitted a proposal for the contract.
The project was approved by Uhuru's administration, and contractors were prepared to start construction after they conducted a feasibility study.
Which other road projects stalled?
TUKO.co.ke previously reported that a KSh 47.3 billion budget cut had forced the suspension of 3,000km of road development.
In this, 1,089 km of highways designated for construction were suspended, while more than 2,300 km of roads intended for renovation were put on hold.
The Horn of Africa Gateway Development Project and the Lokichar-Amosing route were among highways whose construction was halted.
Proofreading by Mercy Nyambura, copy editor at TUKO.co.ke.
Source: TUKO.co.ke
