Africa-Press – Kenya. The government plans to pay contractors at least Sh20 billion this week for road works done within the first quarter of this year, PS Joseph Mbugua has said.
This, as he affirms the government’s commitment to ensure there are no pending bills, after clearing a total of Sh177 billion, which contractors were owed since 2020.
According to the PS, the successful clearing of pending bills came with the securitisation of the Road Maintenance Levy Fund (RMLF), as a major innovative financing mechanism which has helped address infrastructure funding gaps.
This strategy involves converting future, predictable RMLF revenue into immediate cash by selling the rights to these future collections to investors.
An initial securitisation of Sh7 collected per litre of fuel sold saw the government secure Sh175 billion.
This, together with exchequer disbursements, ensured all road contractors are paid their dues, PS Mbugua said.
“We don’t have any pending bills, and this week we plan to pay certificates raised in Q1 of this year. Going forward, we don’t want to have pending bills,” Mbugua said.
At least 875 contracts had not been honoured, leading to stalling of key road projects across the country.
Those who owed Sh50 million and below, about 560 contacts, were paid early last year, with the rest being cleared during the year to December.
Cabinet approved the securitisation of upto 50 per cent of the RMLF, which puts it at Sh12.50, enabling the government to secure the much-needed funds to pay contractors.
The payment of pending bills has revived road projects across the country, with a multiplier effect across the economy, including cement industry, quarry, steel industry, among others.
This, as the government also moves to construct new roads with a target of at least 6,000 kilometres in the medium-term.
Meanwhile, the State Department for Roads data shows only 20 per cent or 48,052 kilometres of roads in the country are on good condition, 46 per cent (109,463km) are in fair condition, while 77,720 km or 33 per cent of the total road network is in poor condition.
At least 3,887 kilometre of roads are under construction.
The country has a total road network of about 239,122 km, where 181,858 are within counties, while 57,263 km are national trunk roads.
The government needs at least Sh600 billion to maintain the road network, with up to Sh1.78 trillion if it is to develop and maintain, against an annual budgetary allocation of about Sh60 billion.
“This is what brought about pending bills because you have running projects, new projects, so you end up not honouring all the contracts. This is something that we have corrected and want to maintain going forward,” said Mbugua.
Key ongoing projects in Nairobi include Mombasa Road-JKIA lower road, which is being upgraded, and the Ngong Road project, which includes a modern viaduct designed as a dual carriageway, aimed at improving traffic flow through one of Nairobi’s busiest routes.
In addition to serving motorists, the two projects have been designed with Non-Motorised Transport (NMT) users in mind.
Facilities include dedicated pedestrian walkways, bicycle tracks, as well as landscaping and beautification elements to enhance the overall urban environment.
