President Uhuru Kenyatta has urged government officers and State agencies to stop leveraging on inflated costs of infrastructure projects to siphon public funds.
While facing the Cabinet Secretary for Transport and Infrastructure James Macharia and other panellists drawn from the sector, the President said during a televised event at State House, Nairobi, that the country faces the challenge of using resources allocated to the sector appropriately and efficiently because corrupt practices have driven costs high.
“The cost of constructing a road is too high and that is why I continue to challenge these people to explain why a road should cost Sh120 million per kilometre. They normally say it is because of the tonnage it will hold, and the design. Of course that is not true! It is a way to steal money,” said the President.
“Why do we need such kind of roads (for heavy commercial van) going to my village in Ichaweri, when what the people there need is a good road for a vehicle carrying tea leaves?
Such high tonnage roads are only needed when we are constructing highways. If we bring down the cost, we will open all our roads and enable our people to access markets and hence reduce the cost of farming,” he said.
The President’s observations are well supported by the government’s failure to get acceptable bids for the Annuity Financing Model which had the President launched in July last year.
In May, the Director of Public Private Partnership Stanley Kamau told the National Assembly’s Departmental Committee on Finance, Planning and Trade that the programme had lagged behind schedule after private sector bidders gave outrageous quotations.
“When we tendered for the first 3,000km, the bids that we received had very high prices because there was some misunderstanding about the project.
While the construction cost was relative comparable, the financing cost of the projects was very expensive because the bidders were going to borrow money from local market and since the interest rates are too high, they also quoted high prices beyond the normal cost,” Kamau said.
But most of the bidders quoted between Sh100 million and Sh300 million per kilometre of road paved when the government currently spends Sh25 million for every kilometre of rural roads, and between Sh50 million and Sh80 million for each kilometre of urban and trunk roads.
The programme was planned to expand and deliver a high quality roads at minimal cost. Since independence, only 14,100km have been paved out of the 161,100km road network. Machakos Governor Alfred Mutua managed to spend Sh650 million to build a 33km of road.
Thika road, designed for heavier traffic, cost Sh31 billion for 50km of road. This translates to Sh620 million per km, which can be broken into two since it has four lanes hence around Sh300m/km. The road also had bridges, interchanges and other additions that scaled the cost.
The President also challenged State agencies in the infrastructure sector to allow the private sector to construct and manage some roads as one way of opening up the country and allow the government focus its budget in doing roads that have public interest.
“Allow the private sector to do roads and toll them. The government cannot do all roads with the kind of infrastructure budget deficit we have. Cooperate and partner with the private sector. Let the government do the roads for the mwananchi but those roads that can be profitable, let the private sector do them. That way we will open the country,” the President advised.
The President also reacted sharply to an article appearing in The Economist, which cited World Bank criticism of Kenya’s Standard Gauge Railway as an uneconomical project, by stating that the country understands well infrastructure projects it should invest in and will not be dictated upon.
“The now fully grown Asian Tigers are probably among the most prosperous nations in the world. Yet they ignored the World Bank and the IMF. Today they actually have their own development bank,” he said.
“I just want to pose a question to those who challenge us as a country and as a continent where are those nations today,” President Kenyatta said. He said African countries understand the priorities of their people and should not be dictated upon on what infrastructure projects to implement.
“Please, we know what we need, we know what we must do. We are no longer going to be the dumping ground for products and goods while our people have no jobs, while our people suffer in poverty,” said Uhuru.
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