Bechtel is setting up Kenya for another $3 bln loan with $2 bln interest in 25 years

Geza Ulole

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Kenya, US firm to hold talks on $3bn expressway

WEDNESDAY JULY 4 2018


Nairobi to open formal discussions with American giant construction firm Bechtel for the construction of Kenya’s first expressway. PHOTO FILE | NATION

In Summary
  • Treasury set for formal negotiations on funding model for Nairobi- Mombasa expressway.
  • The four-lane dual carriage is expected to ease congestion on the key route that connects the Port of Mombasa to Nairobi.
  • It will facilitate an uninterrupted movement of vehicles at a speed of up to 120 kilometres/hour.


By BUSINESS DAILY
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Kenya will next week open formal discussions with American giant construction firm, Bechtel Corporation, over the financing model for the proposed Ksh300 billion ($3 billion) Nairobi-Mombasa expressway.

While the government is keen to have the funds for building of the 473-kilometre road sourced by the US firm which will then recoup its investment and a margin by charging a toll fee, the latter has been pushing Kenya to contract a loan for the project.

Bechtel Corporation says the Public Private Partnership (PPP) model, preferred by the government, will cost taxpayers up to Ksh500 billion ($5 billion) over 25 years.

Treasury secretary Henry Rotich said the two parties will now hold discussions from next Monday to agree on the best financing framework for the project.

“Bechtel team will be coming from 9th July to have a detailed discussion with us (Treasury) and other agencies. They have already done some work and we have agreed to continue that discussion,” Mr Rotich said.

“We will commence detailed discussion on how the financing approach will be undertaken under that project. We will be discussing modalities, financing structuring and the details for us to be clear on how to undertake this project.”

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Ease congestion

The four-lane dual carriage is expected to ease congestion on the key route that connects the Port of Mombasa to Nairobi by facilitating an uninterrupted movement of vehicles at a speed of up to 120 kilometres/hour.

Bechtel inked a deal with the Kenya National Highways Authority (KeNHA) to design, build and operate the highway – which will have interchanges to allow entry and exits – last August.

The decision to build the key road followed a recommendation by consultancy PricewaterhouseCoopers (PwC), hired to conduct the feasibility study in February 2015.

Transport and Infrastructure secretary James Macharia said in May funding the road under the PPP model as opposed to public debt will ease the debt repayment pressure on taxpayers.

Kenya, US firm to hold talks on $3bn expressway
 
hhahahahahahaha yaani kenya meshauzwa na ile chenchi iliyobaki imeuzwa tena
 
ROBERT KARIUKI said:
This is a PPP financing model where the government is not involved in debt payment.
Click to expand...
Yes Bechtel have seen PPP cant work in Kenya where SGR is commuting empty, is and have adviced GoK taking up a loan instead of that PPP that is to cost poor Kenya $3 bln to be payed at a cost of 2 bln in 25 years if they r to erect and operate toll services! Read again!
 
The biggest projects in Tanzania right now are Ubungo flyover and dreamliner.
LDCs should take a back sit as grown ups are discussing mega structures and projects.
Whatever financing arrangement is agreed on, it is Kenyans who will pay with their taxes, without any assistance from our LDC neighbour.
By the time you are done financing your 2 or 3 projects ''with your own money", Kenya will be unrecognizable and we will ably and diligently service our debts.
 
Kenya toka mpate uhuru mradi mkubwa ni deal mliowapa wa China, wawa shauri, wafanye usanifu, wawakopeshe, waandae mkataba then waka wasainisha! waka wajengea then wana waendeshea mradi!!!! Sasa mmekamatwa kwenye madeni mazito.

Sasa hayo yote mliyofanyiwa Tz ime amua kufanya yenyewe. So mfupa mlioshindwa kuutafuna Tz ana umung'unya.
 
We built TAZAMA pipeline n TAZARA railway at equivalence of today's cost of blns of US dollars n in those years. My friend nothing to brag of!
 
ROBERT KARIUKI said:
This is a PPP financing model where the government is not involved in debt payment.
Click to expand...

Who told you that PPP is not borrowing money for the project!!!???
The government burden to pay for the project is there to stay. Since the project is not expected to generate income (not toll road), the government has to pay for availability payment to the private party. If it is a project that generate revenue, a private party will be paid from precedes collected from users of the rendered services.
So the government will be not burdened much if a project has both financial and economic internal rate of return. The express ways are normally public good which are non rival and excludable. It's is available for Tommy and Dickey with no condition. Any member of the public is free to access and use it without a fee, so long as he considered that he/she has paid the tax.
 

That's a typical PPP project.
 
Tz sio ldc wewe mbona huelewi
 

My friend, ata kabla mradi wa SGR, Kenya was miles ahead of Tanzania in everything.
It might be the largest SINGLE project, but there have been uncountable projects of varying size since independence.
Huko Tz SGR ni kelele tu za Magufuli.
If your national budget (which is half of Kenya) is already in deficit, where is the money coming from.
Yes, kuna uwezekano kwamba mtajenga na pesa yenu, lakini mradi utamalizika 2050.
 
Geza Ulole said:
We built TAZAMA pipeline n TAZARA railway at equivalence of today's cost of blns of US dollars n in those years. My friend nothing to brag of!
Click to expand...

Those are ancient projects. Travel around Kenya and you'll find pipelines and other pre-china money projects.
Mind you, ata kabla ya China kuleta pesa, Kenya ilikuwa kama ulaya compared to Tanzania.
 
You got to format your brain bruh, seems like its already full of Flying toilets[emoji23] Wakenya mnajifanya hamumuelewi magufuli ila chamoto mnakiona[emoji23] Pitia kwenye thread ya SGR Updates uone train ya kisasa ya umeme first in all Africa ikijengwa, first phase 2019 tunaipokea, second phase 2020_
 

Nimepitia hizo thread za kipuuzi. Your SGR is less than 0.5% complete. Kama nilivyokueleza, if you keep up this pace, it will be complete in 2050.
Tembea Skyscrapercity uone SGR ya Kenya inaendelea kwa speed gani.
There in Bongolala you build 3 pillars and it is big news. Try building 300 pillars.
 
You sound so stupid bruh, hide your ignorance[emoji23] watu wameshaanza kujenga hadi madaraja na barabara za juu za tren (flyovers)i plus reli imeshatandikwa baadhi ya maeneo eti wewe unasema 0.5%??[emoji23][emoji23] kuna kampuni mbili moja inajenga Dodoma kuja morogoro nyingine Dar hadi Moro hakuna kusubiri_ 2019 first phase inakabidhiwa na 2020 second phase, watch this space. Magufuli sio Uhuru.
 

SGR ya Kenya hatufichi. Picha zimetapakaa kila mahali.
Kwanini hii yenu ni maneno matamu tu? Propaganda za serikali twazifahamu vizuri.
Ilhali hii SGR yenu ata haijulikani scope yake, phase ngapi, capacity, timelines, funding etc. Hizi details zote zinafichwa kwa footnote.
Kazi tu kusema mnajenga kwa pesa yenu ilhali ata budget imejaa decifit kubwa. Pesa mtavuna wapi?

Sasa hivi hakuna mtu yeyote anaweza sema kwa uhakika SGR ya Tanzania itakamilishwa lini. Duniani nzima sijawai skia project fogothery kama hio.

Hapa Kenya, phase 2 tunajua kwa uhakika kwamba itakamilishwa 2019.
Phase 1 pia tulikuwa tunajua muda wake.
 
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