The government is finally establishing an agency to set up and manage toll stations on some roads.
The National Toll Fund will be among steps taken to re-introduce toll stations on Kenyan roads and have road users pay maintenance of those roads.
The National Treasury has in the past sought consultants to advice on how to undertake tolling.
Through its Public Private Partnership (PPP) Unit and the Kenya National Highways Authority (Kenha), the government has also started searching for a firm that will rehabilitate the Nairobi-Mau Summit Road, which will be among the roads to have toll stations.
The plan has so far elicited different opinions, with stakeholders divided between the need to raise money to maintain current roads and building new ones in tandem with global practices. Others have raised concerns over double taxation.
“We are in the process of establishing the National Toll Fund to support the development of world class national trunk roads, key among which are the Mombasa to Malaba and Busia, as well as Lamu to hinterland destinations,” National Treasury Cabinet Secretary Henry Rotich said when delivering the Budget Statement for the 2018/19 financial.
Road maintenance
The government has earmarked a number of roads on which it plans to install tolling systems. The roads will be upgraded or constructed through a PPP model, where private sector firms will undertake construction works and ensure they remain in good condition over an agreed contract period.
Among the road projects earmarked for tolling are Nairobi-Mombasa, the second Nyali bridge that will connect Mombasa Island to the mainland, the Nairobi-Mau Summit road, the Nairobi Southern Bypass and Thika Superhighway. These five projects, some of which will be constructed while others will be refurbished, are projected to cost Sh320 billion, with maintenance leases running between 10 and 30 years for the different projects.
The government has been looking for a firm that will rehabilitate, expand and later maintain the Nairobi-Nakuru-Mau Summit road. The firm will also operate and maintain the Nairobi Southern Bypass.
Revenues from road tolls will be used by the road operators in maintenance of roads. The government in the past argued that money collected through the Road Maintenance Levy has not been adequate to cater for road repairs and hence the need to look for additional revenues. In 2016, Sh40 billion was collected through the levy, which is factored in retail prices of fuel. It currently stands at Sh18.
The planned fees that will be charged for using the select roads have faced criticism from consumer lobbies that claim the move would result in road users paying multiple taxes.
Another road that is a candidate for tolling is the 530 kilometre Lamu-Garissa-Isiolo road. Kenha recently signed an agreement with Lamu Road Consortium which will build the road at a cost of Sh62 billion ($620 million). The consortium, which comprises of Group Five Proprietary Ltd and the Development Bank of Southern Afrca (DBSA), will finance and build the road and there after manage the road through to the year 2047.
At the same time, Rotich said the government would resuscitate the roads’ annuity programme mooted in 2015 but which failed to take off due to differences with private sector players that had expressed interest in the plan.
Under the plan, contractors would design, finance and build roads, then manage them over a three-year period. It, however, failed to kick off, with the government citing inflated costs, while the contractors felt they should get good rates considering they would have to look for financing, build and maintain the roads and only get paid long after the projects were completed.
Rotich said the plan is now back on track, with two projects in Kajiado County having secured financing.
“Under the PPP programme, two road annuity projects have reached financial close, namely Ngong-Kiserian-Isinya and Kajiado-Imaroro roads. These roads will shortly progress to construction,” he said.
