The Kenyan government is poised to pay approximately Sh6 billion to a consortium of French companies following the cancellation of the Nairobi-Nakuru-Mau Summit toll road project. The consortium, comprising Vinci Highways SAS, Vinci Concessions SAS, and Meridiam Infrastructure Africa Fund, had secured the contract under a Public-Private Partnership (PPP) model during former President Uhuru Kenyatta’s administration.
Reasons for Cancellation
The project’s termination stemmed from concerns over high toll fees and financial risks. Motorists were expected to pay up to Sh6 per kilometer, translating to Sh1,050 for small cars and Sh6,300 for heavy trucks over the 175-kilometer stretch. Additionally, the PPP agreement obligated the Kenyan government to cover revenue shortfalls if toll collections did not meet projections, further straining public finances.
Treasury reports indicated that the government would need to secure additional loans to fulfill service payments over the initial 13 years of the 30-year concession, a move deemed unsustainable given the country’s fiscal constraints.
Shift to Chinese Partnership
Following the cancellation, President William Ruto’s administration initiated discussions with Chinese firms to take over the project. The revised plan includes extending the dual carriageway from Rironi to Malaba, enhancing regional connectivity. This shift aligns with Kenya’s broader infrastructure strategy and its engagement with China on projects like the Standard Gauge Railway.
Diplomatic Implications
The cancellation has potential diplomatic repercussions, considering the project’s significance in Kenya-France relations. The French government had backed the consortium, and the project’s termination may strain bilateral ties. While the National Treasury initially estimated termination costs at Sh100 million, historical precedents suggest that compensation could escalate to billions, as seen in previous contract disputes.
Future Outlook
The Kenyan government is now focused on renegotiating the project’s terms to ensure affordability and fiscal sustainability. By partnering with Chinese firms, the administration aims to advance the critical infrastructure project without imposing excessive financial burdens on taxpayers or motorists.
As developments unfold, stakeholders await further details on the revised project’s scope, financing, and implementation timelines.
Kenya Faces Sh6 Billion Compensation After Cancelling Mau Summit Toll Road Deal with French Firms
