Kenya’s Mega Road Deal: China vs. France for Sh184bn Project
Following a price dispute with the French, President William Ruto’s administration has presented the Sh184 billion Mau Summit Highway to Chinese investors. This is the latest development in the controversy surrounding the financing of what promises to be Kenya’s largest road project.
Saturday, the President and other senior government officials informed a Chinese delegation that the dualling of the 233-kilometer highway was one of the available infrastructure projects.
The Chinese have previously lobbied to be included in the action.
Initially, a French consortium secured the bid. However, Roads Transport Principal Secretary Joseph Mbugua revealed last month that the Kenya Kwanza administration had halted construction of the $1.3 billion Mau Summit highway.
Mr. Mbugua stated that the government deemed the total cost of the project to be excessive given Kenya’s current fiscal constraints.
He disclosed that the government was negotiating with the contractors and financiers, a move that will delay the launch of the project, which has attracted funding from the World Bank and the African Development Fund.
“We are still in negotiation. Due to the current economic climate, it became difficult for us to afford their services, so we requested that they revise their proposal to determine whether they could be made more affordable, as stated by Mr. Mbugua.
Saturday, the government took steps to entice Chinese participation in the construction of the 233-kilometer Nairobi-Nakuru-Mau Summit toll road.
Dr. Ruto stated that the Kenyan government had initiated bilateral discussions with its Chinese counterpart regarding the conclusion of several pending road projects, including the widening of a 175-kilometer four-lane dual carriageway.
During a high-level meeting with Wang Yi, a Member of the Political Bureau of the Communist Party of China’s Office of the Central Committee and Director of the Office of the Central Committee of Foreign Affairs, the President stated, “We are prepared to expedite discussions and reach a conclusion on the implementation details of the proposed projects.”
Dr. Ruto pointed out that these initiatives can be pursued either through public-private partnerships or government-to-government relationships.
Mr. Wang, for his part, stated that China would prioritize areas that would help Kenya prosper.
“China will consider the Kenyan government’s top priority areas of interest,” he said.
In addition, Roads Cabinet Secretary Kipchumba Murkomen met with a Chinese delegation led by Vice Foreign Minister Deng Li.
Mr. Murkomen tweeted, “Our discussions centered on pending projects in the road and transportation sector, as discussed yesterday (Saturday) with President Ruto.”
The government also intends to upgrade the Jomo Kenyatta International Airport (JKIA) and the ports of Mombasa and Lamu, in addition to the dualization of the Mau Summit.
The French consortium of Vinci Highways SAS, Meridian Infrastructure Africa Fund, and Vinci Concessions SAS was entrusted with constructing a four-lane dual carriageway from Nairobi to western Kenya using a public-private partnership (PPP) model.
The consortium, known as the Rift Valley Highway Limited, was anticipated to recoup its investments in the road within 30 years by charging tolls.
However, the new administration has yet to authorize the project’s construction, which was scheduled to begin in September 2021.
Former president Uhuru Kenyatta initiated the initiative, which is supported financially by the World Bank and the African Development Bank.
If the Chinese are awarded this contract, they will have constructed two of the country’s main toll roads; the China Road and Bridge Corporation (CRBC) has already constructed the Nairobi Expressway, the largest PPP project to date.
China is eying the new PPP model favored by the Kenya Kwanza administration as the government runs out of fiscal space to take out additional loans.
Even though contractors have yet to break ground on the 233-kilometer road, the government has allotted Sh816 million for the acquisition of land along the proposed highway in the four fiscal years leading up to 2025/26.
Having received financial support from the African Development Bank (AfDB) and the World Bank, the consortium of three French firms previously indicated they were prepared to break ground.
Contractors and financiers have indicated that they are awaiting word from President Ruto on when construction should commence.
During his two visits to France in January, President Ruto met with his French counterpart Emmanuel Macron, and it is believed that the construction of the road figured prominently in their bilateral discussions.
France has expanded its activities beyond the Francophone nations and has identified Kenya as its entry point into the East African region.
Kenya’s Mega Road Deal: China vs. France for Sh184bn Project
