Kenya and US firm Bechtel to hold talks on $3bn Nairobi – Mombasa expressway

Kenya, US firm to hold talks on $3bn expressway

Kenya will next week open formal discussions with American giant construction firm, Bechtel Corporation, over the financing model for the proposed Ksh300 billion ($3 billion) Nairobi-Mombasa expressway.

While the government is keen to have the funds for building of the 473-kilometre road sourced by the US firm which will then recoup its investment and a margin by charging a toll fee, the latter has been pushing Kenya to contract a loan for the project.

Bechtel Corporation says the Public Private Partnership (PPP) model, preferred by the government, will cost taxpayers up to Ksh500 billion ($5 billion) over 25 years.

Treasury secretary Henry Rotich said the two parties will now hold discussions from next Monday to agree on the best financing framework for the project.

“Bechtel team will be coming from 9th July to have a detailed discussion with us (Treasury) and other agencies. They have already done some work and we have agreed to continue that discussion,” Mr Rotich said.

“We will commence detailed discussion on how the financing approach will be undertaken under that project. We will be discussing modalities, financing structuring and the details for us to be clear on how to undertake this project.”

Ease congestion

The four-lane dual carriage is expected to ease congestion on the key route that connects the Port of Mombasa to Nairobi by facilitating an uninterrupted movement of vehicles at a speed of up to 120 kilometres/hour.

Bechtel inked a deal with the Kenya National Highways Authority (KeNHA) to design, build and operate the highway – which will have interchanges to allow entry and exits – last August.

The decision to build the key road followed a recommendation by consultancy PricewaterhouseCoopers (PwC), hired to conduct the feasibility study in February 2015.

Transport and Infrastructure secretary James Macharia said in May funding the road under the PPP model as opposed to public debt will ease the debt repayment pressure on taxpayers.

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