Kenya on Wednesday signed a deal to construct a highway to link the country to Ethiopia and South Sudan.
James Macharia, Cabinet Secretary in the Ministry of Transport, told a media briefing in Nairobi that the government has signed a commercial agreement with Lamu Road Consortium (LRC) comprising of South African firm, Group Five Proprietary Limited and the Development Bank of Southern Africa to finance the construction of the 530 km Lamu-Garissa-Isiolo road at a cost of 620 million U.S. dollars.
“The road is the first section of the Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) corridor that seeks to link Kenya to the landlocked countries in East Africa,” Macharia said.
“It is projected under the proposed commercial contract that the construction of the 530 km highway will commence in mid-2018 and take four years to complete,” he added.
Over the last two years, the LRC has been undertaking studies and presented a privately initiated investment proposal investment to the government for the development of Lamu-Garissa-Isiolo Road.
Macharia said that the road will be undertaken under a public-private-partnership where LRC will finance construction of the road and charge roads users a fee for a period of 25 years to recoup their investment.
Thereafter, Macharia said, the road will revert to government ownership. He said that the government has resorted to private sector financing of infrastructure projects due to limited funds.
“By tapping into the private sector, funds will be able to construct roads faster rather than waiting for availability of public funds,” he added.
Kenya National Highway Authority (KeNHA) has been mandated to plan, design and develop the highway component of the LAPSSET Corridor project, which covers approximately 2,000 km.