Infrastructure Principal Secretary John Mosonik says the government will be seeking funding from banks and other private financiers under a new annuity model and will not depend on State funding.
He said the model not only allows faster completion of the projects but will see more flexibility in terms of payments of the loans by the government.
“The government has been funding most of these projects from the exchequer. Like for the last budget it was Sh99billion. These Sh99billion will go to completing the already ongoing projects which will deliver 3,000km, yet the government has committed itself to starting new projects,” Mosonik said during a media briefing on Tuesday.
The government has already provided Sh3billion to kick off the first phase of 2,000km from December this year.
“The 2,000km will be followed by 3,000km and then 5,000km. So by 2017, we will have actually rolled out these 10,000km,” the PS said.
By adopting this model, the government plans to spread its road construction costs, whereby it will be spending about Sh44bn a year for the next eight years and be able to accomplish its targets.
The rural roads will be 20 percent with the remaining 80 percent of the 10,000km being in the urban areas.
The ministry will also adapt another strategy where a contractor will design, construct and maintain the road which has not been the case before.
He says by the introducing the aspect of maintenance, most of the contractors will be forced to ensure proper job, to avoid incurring extra costs later during maintenance.
“The contractors will guarantee construction quality and undertake post-construction maintenance of roads,” he emphasised.
Contractors will also be expected to complete contracted works within the stipulated time, “which will not exceed three years.”
The ministry has hence organised a Road Development Stakeholders Conference starting Wednesday July 30 in Nairobi to create more awareness on the new Annuity model.
“We have invited the county governments, Financiers, local contractors, cement manufacturers among others. This will be a huge opportunity in the sector.”