Kenya: Players in the construction sector stand to win big as the Government kicks off the 10,000km roads programme opening up more than 40 multi-billion shilling road construction tenders to be developed in a new private public partnership (PPP) formula.
This comes in the wake of the new Public Private Partnership Act, 2013 which allows Government to obtain additional sources of finance from the private sector, cutting reliance on national revenue collections.
“We have successfully completed the critical stages of selection of bidders for the first phase of the programme through pre-qualification and issued tender documents to 49 individual bidders pre-qualified,” stated Ministry of Transport and Infrastructure Principal Secretary Eng John Mosonik.
“Today we are receiving bids for the first nine out of the 45 lots spread throughout the country covering an approximate 720 killometre road network and we expect to receive bids for the remaining 36 lots by February 6 this year, and shall soon launch the selection process for phase two of the programme,” he said.
The road construction projects are just a few of the tenders in the infrastructure and transport sectors that are now opened to the private sector through the new Public Private Partnership Act, 2013 signed into law by former president Mwai Kibaki.
Other projects that have since been cleared include geothermal projects by the Geothermal Development Company, (GDC), dualling of the Mombasa – Nairobi and Nakuru – Nairobi highways and the construction of the Nairobi commuter rail services.
Others include solid waste management systems for Nairobi, Nakuru and Mombasa, construction of sea ports in Kisumu and Lamu, a second container terminal in Mombasa and housing projects for prison and police staff.
The Government has been hard pressed to find alternative sources of funding to propel ambitious growth targets and has been forced to turn to the local private sector for help.
However, the avalanche of lucrative Government development tenders is expected to heighten tender disputes which have been referred to Parliament or the Judiciary stalling several projects and increasing the eventual cost of execution.
The Government is looking to avoid the legal and parliamentary pitfalls that befell some of its parastatals ending up in costly legal battles and delays.
The new PPP law which will be put to the test by these projects, strengthens existing processes and removes funding constraints.
This has been done through the establishment of a Project Facilitation Fund whose function is to finance or provide alternative sources of finance to meet the cost of selected PPP projects.