He said that the Nairobi–Mombasa Expressway will be constructed as a Toll Road, and upon completion, the Government will procure and assign private firms to operate and maintain the highway.
Part of the tolled fee shall be applied towards repayment of ECA Loans. KeNHA says a feasibility study has been completed and it shows that the project is viable. “The expressway will be designed for consistent speeds of 120kph, hence reduce travel time from Nairobi to Mombasa from the current 10 hours, to about four hours.”
A source at Treasury who spoke on condition of anonymity said that the plan was to get a private party to finance, build and operate the road for a 30-year period as per a feasibility study financed through a World Bank loan.
He revealed that the feasibility study had concluded that the PPP route offered better value for money than the traditional EPC procurement approach. “There is little chance that a contract not competitively procured will be cheaper than an international competitive tender,” noted the source at Treasury who understands government funding procedures.
The source seemed to agree with part of the State Department of Infrastructure brief that suggests that Kenyans may not get value for money from a non-competitive process.
The brief says Bechtel’s construction costs per kilometer are higher than estimates presented to the Ministry by PricewaterhouseCoopers. Bechtel’s costing proposal is estimated at Sh600 million per kilometer compared to Sh500 million per kilometer estimate given by PWC ($6 million Vs $5 million).
“The per kilometer costs under the PPP proposal includes all taxes and duties while Bechtel’s proposal assumes complete tax exemption for the project (corporate tax, income tax and import duties) - which could reasonably be assumed to cost the Government of Kenya an additional $1 million (Sh100 million) per kilometer,” the brief notes.