Politics and policy
President Uhuru Kenyatta. PHOTO | FILE
By NEVILLE OTUKI, notuki@ke.nationmedia.com
In Summary
- The construction of the first 2,000km of the rural roads, which is set to begin this fiscal year, will consume 60,000 tonnes of cement, 15,000 tonnes of lime and 80 million litres of bitumen.
- Official data shows cement consumption stood at 5.05 million tonnes last year against a production level of five million tonnes.
- Steel and iron producers are also expected to benefit from this initial project, which is expected to cost Sh52 billion out of the projected Sh260 billion.
Cement firms top the list of beneficiaries of a plan
by the State to build a 10,000km road network to open up remote areas in
the next three years.
Officials estimate that the construction of the first
2,000km of the rural roads, which is set to begin this fiscal year, will
consume 60,000 tonnes of cement, 15,000 tonnes of lime and 80 million
litres of bitumen.
Steel and iron producers are also expected to
benefit from this initial project, which is expected to cost Sh52
billion out of the projected Sh260 billion.
“It will take high level contractors to manage
about 30 major contracts packaged in lots, and about 400 other smaller
contracts,” the Kenya Rural Roads Authority director general Mwangi
Maingi told a planning workshop in Nairobi on Wednesday.
The project is set to buoy local cement firms to expand their capacity to meeting the increased demand.
Official data shows cement consumption stood at 5.05 million tonnes last year against a production level of five million tonnes.
On Wednesday, officials said the government will
not pay contractors upfront but will make payments periodically after
the project has started, with the assurance that quality standards have
been met.
President Uhuru Kenyatta endorsed the adoption of
the annuity financing model where contractors will borrow money from
banks to implement projects with the Treasury acting as a guarantor. The
Treasury will repay the loans over eight years.
Under the model, a contractor will design,
construct, finance and maintain the road for 10 years before handing it
over to the State.
This is aimed at improving efficiency among
contractors while ensuring availability of funds to prevent time and
cost overruns experienced in the past.
“The annuity financing framework will focus on
value for every shilling and ensure performance and generation of
synergies among stakeholders,” Mr Kenyatta said.
He asked the private sector to take up
infrastructure projects to complement the government’s development
agenda, saying his administration was banking on increased
inter-connectivity to boost growth in remote areas and ease the cost of
doing business
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