By VICTOR JUMA, vjuma@ke.nationmedia.com
In Summary
TransCentury
is among firms short-listed to build roads under the public private
partnership (PPP), which will see the Nairobi Securities Exchange-listed
company participate in the multi-billion shilling projects.
The company has been selected together with France’s Eiffage SA, the lead partner in the consortium.
They were among several other firms pre-qualified
to build roads including Sinohydro Corporation Limited (China), SBI
International Holdings AG (Switzerland) and a consortium formed by Sogea
Satom (France), H. Young and Gibb Africa Limited.
“Notice is given to interested persons that the
following four firms/consortia have been short-listed for the
development of roads under the repackaged Lot 6,” reads part of the
Kenya gazette notice signed by Kenya National Highways Authority
director-general Peter Mundinia.
The Public Private Partnership Committee — a
government outfit composed of several bureaucrats including principal
secretaries of lands, transport and energy — picked the companies.
The short-listed companies are expected to raise
funds for roads construction next year, with the firms set to recoup
their investment over years from road tolls planned on several roads.
The government plans to introduce tolling on the
Nairobi-Mombasa highway, the Nairobi-Nakuru-Mau Summit highway, Thika
Road, Nairobi’s Southern Bypass and a second Nyali bridge in Mombasa.
TransCentury undertakes roads construction through
its subsidiary Civicon Limited whose contracts have been concentrated in
South Sudan and the Democratic Republic of Congo.
The scale of the contract that could be awarded to
the TransCentury consortium is not clear, but the group is expected to
build a substantial part of the 10,000 kilometres new roads target.
The government is investing heavily to maintain
existing roads and build new ones in Nairobi, Kisumu, Mombasa and
Nakuru, among other regions.
Tolling proposal
Rollout of the projects will depend on how fast the
government moves to award the contracts and devise means of funding
them including a tolling proposal which has proved controversial.
“Under the timelines presented by the transaction
advisors, projects would all reach financial closure by the middle of
2017,” the World Bank commented on the roads project for which it is
providing technical support.
“This, however, depends not just on the approval of
the tolling policy, currently at Cabinet for endorsement, associated
details of technical implementation on different roads country-wide, but
also rapid decisions from the government on the structuring of the
project, land acquisition as well as the ability of the private sector
to assemble a financing package.”
READ: Double taxation looms in plan to privatise Kenya’s highways
For TransCentury, the potential contracts could give it a
significant boost as it seeks to pay down debt and grow earnings in the
coming years.
The company recently moved to resolve its Sh8
billion debt by getting bondholders to write off Sh4 billion and paying
them Sh2 billion provided by New York-based private equity firm Kuramo
Capital which has been allotted a 25 per cent stake in the company.
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