Bechtel, a US engineering company contracted to build the Sh300 billion Nairobi-Mombasa Expressway, has turned down Kenya’s proposal to recoup its investment via toll fees.
The Parliamentary Budget Office (PBO) on Tuesday disclosed that the American company instead wants the Kenya government to pay it for constructing the highway, a move that may force the country to borrow billions of shillings.
PBO said a study by Inter-America Development Bank showed a road is likely to be a viable candidate for construction through the toll model if it has a flow exceeding 5,000 vehicles per day unless the government offers a sizeable subsidy to the contractor.
“This limits the number of roads that can be undertaken by the model in Kenya to a few sections of the main transport corridors. Along the A8 (Malaba – Eldoret – Nakuru – Nairobi – Voi – Mombasa) road, the Nairobi Expressway has so far proved to be a viable section for tolling while the Mombasa – Nairobi Expressway has proved difficult,” PBO said.
“The contractor has indicated that the country will get better value for money if the road is constructed under an EPC (Engineering, Procurement, and Construction) model rather than a toll model.”
Bechtel noted that under the alternative public-private partnership (PPP) model, the project would cost five times more at $15 billion (Sh1.5 trillion) and take longer to complete.
The proposed project involves the construction of a 473-kilometer dual carriageway that will begin at the Jomo Kenyatta International Airport (JKIA) along the existing Nairobi-Mombasa highway and will snake through seven counties to end at the Changamwe roundabout in Mombasa.
It will be the largest single-contract road project in the country and is projected to generate nearly twice the funds spent to build it over a period of 25 years.
Bechtel won the contract in a government-to-government deal that formed part of President Kenyatta’s discussions with former US President Donald Trump during his US visit in 2018.