The Treasury gazetted regulations that will operationalize a special fund that will finance the tarmacking of the roads in the next five years.
The guidelines on the establishment of the Public Finance Management (Roads Annuity Fund) 2015, details the objectives and purposes, source of funds, management of the fund, payments of the fund as well as winding up of the fund.
Deputy President William Ruto, who chaired a meeting of banks that will fund the project, said the regulations will ensure the government’s new model for road construction through public private partnership works seamlessly.
“The regulations will make sure the road annuity programme operates smoothly by guaranteeing timely payment of contractors and services,” he said.
Ruto who chaired a consultative meeting with leaders from the private sector at the Kenyatta International Convention Centre said that the government was committed to ensuring the initiative succeeds.
He spoke as two banks – Kenya Commercial Bank and Cooperative Bank – agreed to allocate Sh40 billion and Sh8 billion respectively for the project.
KCB Chief Executive Officer Joshua Oigara said his bank has agreed to finance contractors under the programme.
Oigara pledged support from the banking sector to ensure the programme succeeds.
“We as the banking sector are committed to support this initiative to expand the road network in our country,” he said.
He praised the government for the new structure that will allow the private sector play a key role in road construction in the country.
The Gazette Notice follows the approval of the Cabinet on Tuesday for the establishment of the fund that will finance the paving of 10,000km of road around the country. Already Sh500 million has been paid to the fund to kick-start the infrastructure project.
The proposed Road Annuity Programme creates a framework to facilitate a partnership between the Government and the Private Sector under a Public Private Partnership (PPP) arrangement.
The Roads Annuity Fund will ensure a seamless financing of the roads sector from the design, development and maintenance of roads.
The objectives and purposes of this fund shall be to provide funds to meet the National Government’s annuity payment obligations for the development and maintenance of roads under the Annuity Programme.