The Nairobi Expressway made a loss of Sh1.2 billion in the past financial year, underscoring the risk in Public Private Partnerships (PPPs) as an alternative to traditional financing models.
Data from the Treasury shows that the expressway generated revenue worth Sh4.6 billion from July 1, 2023, to June 30, 2024, compared to the operational costs totalling Sh5.8 billion.
The elevated road was expected to net a profit owing to the increase in charges at the beginning of 2024.
This saw the fees increase from the previous range of Sh100 to Sh310 to the current range of Sh170 to Sh500 across all stations.
Spokesperson for Moja Expressway, the company operating the road Jeanne May attributed the loss to the fluctuation of the Kenya shilling against the US dollar and high interest rates despite the road experiencing an increase in traffic.
She explained that the expressway was funded through two ways-50 per cent through the PPP model and the other half as a loan.
Owing to this, she noted that the interest rates had hiked over the years.
“We still have a loan that we need to repay and interest rates have gone high. Also, you have to consider the shilling fluctuating against the dollar,” she said.
In early 2024, the shilling fluctuated against the dollar, hitting an all-time low of Sh160 in January.
At the time, experts blamed the government for failing to read the global market in time.
Currently, the Kenya shilling is trading at Sh129 against the US dollar.
Overall, the report recorded six other PPP projects across the country as part of the government’s efforts to include private investors in mega infrastructural projects.
These include the 35 MW Sosian Menengai Geothermal Power Plant, the 35MW Quantum Menengai Geothermal Power Plant Project and the Kenya Defence Forces Residential Accommodation Project.
Others are Lot 33 of the Road Annuity programme; the Lot 15 of Road Annuity Programme; the Lot 18 of Road Annuity Programme.
Launched in 2022, the expressway is a 27-kilometre elevated road that connects Mlolongo to James Gichuru Road.
Hailed as a key project of the Uhuru Kenyatta administration, the then-government entered a deal with the China Road and Bridge Corporation (CRBC) to construct the road at Sh88 billion.
Under the PPP model, the Chinese firm will operate the road for 27 years to recover its fund before ceding it to the State.
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