The Kenya National Highways Authority (KeNHA) says it is yet to award the tender for the construction of the 473-km Nairobi-Mombasa Expressway.
In a statement, KeNHA disputed claims that it had given the tender to the Korean Overseas Infrastructure and Development Corporation (KIND), saying the firm simply submitted a feasibility report.
“The firm presented a pre-feasibility studies report for the development of the highway based on a PPP model on July 29 this year, and they may wish to submit a Privately Initiated Investment Proposal (PIIP) in line with the requirements under PPP Act, 2021,” KeNHA said.
It clarified that the American firm Bechtel, which has been eying the tender is still welcome to submit its proposal.
The statement signed by KeNHA boss Kungu Ndungu revealed that Bechtel is still working on the best Public Private Partnership (PPP) structure for the project.
A US Capital Investment Company (Everstrong Capital) has also expressed interest in developing the corridor in partnership with Bechtel.
KeNHA’s statement is coming two months after it was reported that the deal had been awarded to the Korean firm after Bechtel allegedly pulled out of the project over financing terms.
The American firm had in August 2017 signed a Sh230 billion deal for the construction of the highway, paving the way for mobilisation of financing from export credit agencies in the US.
However, Kenya backtracked on the deal a year later and asked Bechtel to build the highway with its own money and charge toll fees to recover the investment.
Bechtel declined the offer saying the PPP model would inflate the cost of the project to Sh1.5 trillion – which is five times the budget – as it would involve expensive borrowing and interest payments.
The company insisted on a contract model where Kenya pays for the construction of the highway that was initially expected to cost $2.7 billion.
The Kenyan government initiated the project in September 2016 as part of Kenya’s Vision 2030. The groundbreaking was slated to start in 2018 but it has been delayed to date.
The project will be done as a four-lane from the current two-lane carriageway between Machakos Turn-Off and Mariakani (482) kilometres.
The planned dual carriage is expected to be divided into three main sections; One was to start at Jomo Kenyatta International Airport (JKIA) in Nairobi and end at Kibwezi in Makueni, stretching for 174 kilometres.
Another section was to run between Kibwezi and Voi which is 132 kilometres and the third section was between Voi and Mombasa covering the last 160 kilometres.
The government projects the project to create at least 21,000 jobs during the construction and an additional 2,573 per year during its operations and maintenance.
KeNHA says the project will take five years to complete and work will commence upon completion of studies, designs, negotiation and closure of all financing arrangements.
“The scope of work and source of financing will be determined once all studies and the necessary arrangements are concluded,” KeNHA said.
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