Home Business State says toll law to unlock Sh160bn for Nakuru road

State says toll law to unlock Sh160bn for Nakuru road

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State says toll law to unlock Sh160bn for Nakuru road


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The National Treasury Chief Administrative Secretary Nelson Gaichuhie. PHOTO | JEFF ANGOTE | NMG

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Summary

  • Treasury told MPs that the creation of the National Roads Toll Fund will facilitate financial closure on the Nairobi-Nakuru-Mau Summit Toll Road Project.
  • Treasury chief administrative secretary (CAS) Nelson Gaichuhie said the attainment of the financial closure on the project will trigger the payment of an excess of $ 3.5 million (Sh400 million) into the Public-Private Partnership Project Facilitation Fund.
  • The consumer’s lobby group, Consumer Federation of Kenya (Cofek), on Monday petitioned parliament to reject the new law that will return toll fees on both old and new roads.

The State is pushing Parliament to approve the controversial toll fund law on grounds that it will unlock over Sh162 billion for the construction of the Nairobi Mau Summit highway.

Treasury told MPs that the creation of the National Roads Toll Fund will facilitate financial closure on the Nairobi-Nakuru-Mau Summit Toll Road Project.

Treasury chief administrative secretary (CAS) Nelson Gaichuhie said the attainment of the financial closure on the project will trigger the payment of an excess of $ 3.5 million (Sh400 million) into the Public-Private Partnership Project Facilitation Fund.

“The establishment of National Roads Toll Fund… will facilitate the mobilization, off-balance sheet, of over Sh162 billion in road development funds, and the operation and maintenance of the Nairobi to Mau Summit Highway as a Public-Private Partnership toll road for 30 years, in pristine condition, and a return to the public of an asset with residual economic life in terms of the contracted bonds under the PPP agreement for the project, ”Mr Gaichuhie said.

The consumer’s lobby group, Consumer Federation of Kenya (Cofek), on Monday petitioned parliament to reject the new law that will return toll fees on both old and new roads, on grounds that it failed on the public participation requirement.

“The said regulations fatally fail to meet the threshold of public participation as envisaged under article 10 of the constitution. Road tolls are discriminatory, especially where options do not exist,” Cofek secretary-general Stephen Mutoro said.

A parliamentary committee has already approved the Public Finance Management (National Road Toll Fund) Regulations 2021 which seeks to establish the Fund.

The regulations await the nod of the House to enable the Treasury to establish the kitty.

The State awarded the 233km Nairobi to Mau Summit Toll Road contract to a French consortium made up of Vinci Highways SAS, Meridian Infrastructure Africa Fund, and Vinci Concessions SAS in 2020.

The project will see the road expanded into a four-lane dual carriageway through a Public-Private Partnership (PPP) model.

The consortium is expected to design, finance, construct, operate and maintain the express.

The firm will then recoup its finances using the revenues and income generated by the electronic toll collection system along the road for 30 years.

Mr Gaichuhie successfully lobbied the National Assembly’s Committee on Delegated Legislation which has approved Public Finance Management (National Road Toll Fund) Regulations 2021.

The regulations, which will establish the National Roads Toll Fund, seek to implement the Public Roads Toll Act, Cap 407, which guides the imposition of toll fees on major national roads.

The Treasury is waiting for Parliament to approve the regulations to create the Fund.

The construction of the toll highway from Nairobi to Mau Summit is expected to begin in September and is expected to reduce traffic congestion on the northern corridor.

Transport Cabinet Secretary James Macharia says the project will widen the existing Rironi- Mai Mahiu – Naivasha road into a seven-meter carriageway with two-meter shoulders on both sides.

He said the project will also include the construction of a four-kilometer elevated highway through Nakuru town, and the building and improvement of interchanges along the highway.

The Rironi – Nakuru – Mai Mahiu road forms a vital part of the most important transport corridor in Kenya – the Northern Corridor— which originates in Mombasa and terminates in Malaba.

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