Kenya owes over USD 1 billion in pending payments to road contractors

Kenya owes 145 billion shillings (USD 1.07 billion) for certified works to road contractors and landowners, which is likely to delay ongoing projects, according to a local daily.

Local and foreign contractors are owed 50 and 60 billion shillings, respectively, Transport Cabinet Secretary Kipchumba Murkomen told Parliament.

The balance of 35 billion shillings is due to landowners whose properties were bought for road construction, Business Daily newspaper reported, citing the official.

800 projects are now slowing down

The Ministry of Roads has an ongoing roads portfolio of over 800 projects with a total outstanding cost of 763 billion shillings as of February 28, 2023, Murkomen stated.

He said most pending projects across Kenya are either undergoing slow implementation or have completely stopped due to the government’s failure to provide resources to pay contractors.

The official disclosed that the ministry negotiated with the Roads Annuity Fund to release 12 billion shillings to pay some contractors.

Construction of three footbridges along Mombasa Road will start next week in a Sh1.2 billion project to ease access to the SGR Syokimau terminus and stem pedestrian fatalities along the busy highway.

Transport Cabinet Secretary Kipchumba Murkomen told Parliament that the works that will start on April 27 will include the construction of a footbridge at the Hilton Inn Hotel next to the Syokimau SGR terminus.

The State invited contractors to bid for the construction of the three footbridges in December last year. Mr Murkomen did not disclose the contractor who will construct the three bridges.

The Kenyan construction industry

According to the US government’s International Trade Administration, the Kenyan construction industry is driven by housing and transportation infrastructure. According to the organization, the Kenyan construction industry grew by only 6.6% in 2021, a decline from 10.1% in 2020 and an indication of a slowdown in the short term.

The MENA region construction industry continues to grow, despite rising costs.