KAM wants road maintenance levy used effectively

July 18, 2016
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Wakiaga says manufacturers are in support of investment in infrastructure as it reduces the cost of doing business but emphasised that the money needs to be used for the intended purpose/FILE
Wakiaga says manufacturers are in support of investment in infrastructure as it reduces the cost of doing business but emphasised that the money needs to be used for the intended purpose/FILE

, NAIROBI, Kenya, Jul 18 – Kenya Association of Manufactures Chief Executive Phyllis Wakiaga has urged the Transport Ministry to effectively channel the maintenance levy recently added on fuel products on road maintenance so as to improve infrastructure in the country.

Wakiaga says manufacturers are in support of investment in infrastructure as it reduces the cost of doing business but emphasised that the money needs to be used for the intended purpose.

Speaking to Capital FM Business, Wakiaga says the recent surge in fuel prices will increase transport costs for manufacturers but if used properly, it could lead to better infrastructure which is good for business.

“We agree there is need for good roads, but let the money be used for what is intended for even as the country is working on creating an enabling environment for businesses,” she explained.

Last week the Energy Regulatory Commission (ERC) effected the additional road maintenance levy rates of Sh6 per litre in the latest fuel prices review.

The new rates that were effected at midnight on Thursday, have seen super petrol go up by Sh6.67, diesel Sh9.53 while kerosene went up by Sh3.41.

The government plans to raise Sh60 billion annually from the levy, up from Sh40 billion to maintain the existing roads.

In February, Transport Cabinet Secretary James Macharia stopped plans by the Kenya National Highway Authority (KeNHA) to introduce user fees on four major highways.

KeNHA had erected billboards, notifying motorists of the intention to introduce user fees for road maintenance.

Among the highways that were to be affected include Nairobi-Nakuru, Nairobi-Mombasa, Thika Superhighway and Nairobi’s Southern by-pass.

The government is working on 10,000 kilometres in the country as well as reconstruction of highways.

Among them include James Gichuru Junction Road to Rironi, a section of the A8 Highway which contract was awarded to China Wu Yi Company.

The Kenya National Highway Authority says the contract entails reconstruction of the 25 kilometres section at a cost of Sh16.4 billion aimed at easing traffic flow into and out of the Kenyan capital.

KeNHA last month also signed a contract with China Roads and Bridges Corporation to carry out feasibility studies and designs for the construction of the Nairobi Western Bypass.

The construction is expected to cost Sh17.3 billion and will be funded through a concessionary loan from the Government of China.

Last year Kenya’s position in the ease of doing business Index moved up 21 places to position 108.

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