Transport and Infrastructure Sector in Kenya

Infrastructure investments require enormous financial resources that cannot be adequately met by public sector finance. The government of Kenya is, therefore, seeking private capital support for investment in the areas identified below.

1.  Development of a Duty-Free Port/Special Economic Zone at Dongo Kundu

Development of a duty-free port/special economic zone within Mombasa at Dongo Kundu is one of the priority projects under vision 2030. A total of 3000 acres of land is available for investment in Dongo Kundu, south mainland. The Government is funding a feasibility study and a master plan from June 2010 for the next 12 months. The actual implementation of the project will be done under a public-private partnership framework. Therefore investors are welcome to participate in the actual infrastructure development and the operations of duty-free port/special economic zone.

2. Development of Cruise Ship Facilities

Kenya as a tourist destination has few cruise ship experiences despite being endowed with a long coastline in the Indian Ocean. There is great potential for more cruise ships that may connect Mombasa, Lamu, Zanzibar, Dar-es-salaam, and Seychelles. There is also great potential in Lake Victoria. Opportunities exist for the development of cruise ship facilities at both ports of Mombasa and Lamu, which have a high economic potential given that 75% of tourists are normally destined for the coast. Design of the proposed cruise terminal in Mombasa has been carried out and is ready for implementation.
3.  Development of Airport Infrastructure and Services

A study done in 2005 on private sector participation in airports infrastructure and services in Kenya showed some airstrips situated in tourist circuit areas of Masai Mara and south coast of Mombasa can be viably developed on Build Operate and Transfer (BOT) or Build Operate and Own (BOO) terms.

4.  Development of a Dry dock Port and a Car Bazaar

The new mandate of Kenya Railways is the management of non-conceded assets. It has plans to develop a concept which is aimed at the establishment of a dry dock port and a car bazaar on a 100-acre piece of land at Voi, 100km from the port of Mombasa. The features of the proposed car bazaar will include storage and clearing facilities for imported vehicles, facilities to store and sell cars to prospective customers and support facilities/amenities e.g. offices, banks, hotel, and restaurants. Investors are welcome to partner with Kenya Railways in this venture.

5. Construction of a Second Port at Lamu and a New Transport Corridor

A second port is needed to sustain the growing need for access to sea brought about by the heavy demands of south Sudan and landlocked Ethiopia. It has been recognized for a long time now that Kenya as the principal gateway to sub-region needs an alternative port. The government is financing a feasibility study for corridor development and a port master for Lamu port within the next ten months. Investors are welcome to participate in infrastructure development under BOT arrangements. The cost of implementing the project is USD 5,300 million. The cost for short term plan including the first 3 berths is USD 664 million. The expected Internal Rate of Return will be 23.4%

6. Development of a New Transport Corridor from Lamu

If a second port is developed in Lamu, a new transport corridor that will provide sea access to Northern Kenya, South Sudan, and Ethiopia will be required and comprise of a railway line, oil pipeline, airport, and a road. This will assist in meeting the demand for transport and tourist recreational services in line with Kenya’s Vision 2030. This is a good opportunity for investment.

ALSO READ  Corona virus may become another endemic virus in our communities.

7. Development and construction of Malindi Jetty

This involves completion of the jetty. The part so far constructed is the access and the remaining part comprises of the jetty head where all operations of loading/unloading of goods take place including passengers use. Berthing of sea vessels is also expected once the jetty is completed. The works involve the construction of a reinforced concrete jetty approach and loading bays at the end of the existing 300m long approach deck. Both electrical and mechanical facilities will be provided for optimum operation of the jetty.
When completed the jetty will have a great impact in the following areas:
(i) The fishing industry will be greatly improved due to the provision of berthing and unloading facilities of bigger boats. With increased fish catches the likelihood of fish processing plants starting is high. This will result in job creation thus impacting positively on poverty reduction.
(ii) It is anticipated that there will be an increased number of tourists visiting Malindi which is already a prime tourist destination in Kenya. This will be due to the berthing facilities which can be used for marine sports including international sport fishing competitions.
(iii) The Kenya Navy, Kenya Police and Fisheries Department will be using the jetty’s berthing and mooring facilities while on security patrols along the coastline thus reducing chances of piracy attacks.
(iv) It will form an alternative route by sea from Mombasa and Lamu for transportation of goods and passengers.
(v) It will serve as a rescue facility in case of disasters such as the recent ‘Tsunami The project will be executed as design, build, operate and transfer.

8.  Proposed Ngomeni Jetty and Sea Wall

The project is located at about 20 kilometers north of Malindi town. The works will involve the construction of a reinforced concrete jetty approach and loading bays, electrical and mechanical facilities will be provided for optimum operation of the jetty. It will also involve the construction of a seawall of the overall length of 500 meters. When completed the jetty will have a great impact in the following areas:-
(i) The fishing industry will be greatly improved due to the provision of berthing and unloading facilities of bigger boats. With increased fish catches the likelihood of fish processing plants starting is high. This will result in job creation thus impacting positively on poverty reduction.
(ii) It is anticipated that there will be an increased number of tourists visiting Malindi and its environs which is already a prime tourist destination in Kenya. This will be due to the berthing facilities which can be used for marine sports including international sport
fishing competitions.
(iii) It will enhance cultural tourism
(iv) It will form an alternative route by sea from Mombasa and Lamu for transportation of goods and passengers.
Phase I which involved the construction of the existing approach deck was completed in 1984 (this is 10% of the project). Site investigation for the proposed Phase II of the project was done in 1996/97. The design of Phase II and tender documentation was completed in May 2002.

Another site investigation needs to be done to reconfirm the site conditions after which it will be established if the design needs to be changed to suit any changes. This is because the last site investigation was done 14 years ago. Rehabilitation of the existing approach deck will also need to be done for it has deteriorated over the years.
The revised cost of the project is about Kshs.2.4 billion and construction will take three years to complete if there is no funding constraint.

ALSO READ  Dr. Patrick Amoth elected Vice President

Once completed, there will be berthing facilities for small and medium boats, loading and offloading facilities for goods and passengers which will also involve access of vehicles of up to 7 tons. Fishing, including sport fishing, would go on uninterrupted even during low tides. The huge traffic generated will in effect increase economic activities in addition to the provision of basic social services, hence reducing poverty.

Under the BOT agreements the investor should get returns on investments from levies on sea crafts, sport fishing facilities and fishing activities and other users of the facilities the investor is expected to recoup his investments after 15 years.

9.  Construction of the standard gauge railway line from Mombasa to Malaba

The railway line from Mombasa to Malaba (Uganda Border) has never been upgraded since its construction in 1900. The Government has, therefore, made the decision to develop a standard gauge railway line. Towards this end, the Kenya Railways Corporation (KRC) completed feasibility in March 2011 and by end of July/August 2012, the preliminary designs for the standard gauge railway network will be completed. It is planned that construction of the railway line will be undertaken on Engineering, Procurement and Construction (EPC) arrangement and investors are invited to participate.”

10.  Nairobi Metropolitan Mass Transport Programme

The Transport Strategy is to develop a Mass Rapid Transit system (MRTS) as part of the vision for an integrated multi-modal Mass transport system comprising a Bus Rapid System and a Light Rail System. The feasibility study has been completed and based on the demand assessment; nine corridors have been identified as suitable for the mass rapid transit system in the Nairobi Metropolitan Region (NMR), which covers an area of 32,000km2. It includes the districts of Nairobi, Kiambu, Thika, Machakos, and Kajiado and the County Governments of Nairobi, Kiambu, Machakos, and Kajiado. The investors are invited to participate in the detailed designs and development of the Bus Rapid System and a Light Rail System.

11.  Modern Commuter Rail Service for Nairobi City

Kenya Railways Corporation is looking for investors to rehabilitate and modernize 100km of the existing rail system within Nairobi City, construct 6.5km of new track to the Jomo Kenyatta International Airport (JKIA), and modernize stations and other facilities. With a population of 3.5 million and 1.5 million daily commuters per day, Nairobi City has chronic traffic congestion, which can be solved by developing a modern rail transport system. According to the project’s feasibility study, the number of rail passengers is expected to increase from 5 million a year to 15 million a year at the completion of the project, which will have a capacity for 60 million passengers per year. Compared to minibusses, the project would provide faster and cheaper transportation. The project aims to replace the existing inefficient rail, signaling equipment, stations and locomotive-hauled coaches with modern and efficient rail infrastructure and passenger coaches with Multiple Unit technology, which is more suited to commuter rail operation. It will also enable rapid transport between JKIA and the Central Business District, further cementing Kenya’s capital city as the commercial hub of East Africa.

ALSO READ  President Kenyatta Mourns Former Makueni MP Peter Kiilu

The total cost of investment for the project is estimated to be USD 335-million under a Public-Private Partnership (PPP) framework. The project is estimated to have an Internal Rate of Return of up to 17%.

12. Road sub-sector

Given the network size, traffic composition, and projected future growth rates, the demand for infrastructure investment in Kenya exceeds budgetary financing capacity. Off budgetary financing has, therefore, become of necessity in order to meet the challenge of the growing road traffic. Private sector participation in financing infrastructure delivery on commercially viable terms has been found to be critical in bridging the financing gap.

(i).  Concession for Nairobi Urban Toll Road

Kenya’s ministry of roads is offering a concession to credible investors for the proposed Nairobi urban toll road. The project will involve the construction of overpass section through Nairobi Central Business District, extension of dual carriageway to the proposed ICT City at Konza, construction of four (4) interchanges, and tolling and maintenance operations for 30 years.

The project would reduce the transportation cost on the Northern Corridor route by 25%, and reduce travel time between the port of Mombasa and the hinterland by two (2) hours. Other benefits would include reduction of traffic congestion in and around the CBD, and expansion of spatial development opportunities for the greater Nairobi Metropolitan area. The feasibility study shows that the northern corridor concession 2 (Nairobi Urban Toll Road) that carries an average of 18,000 vehicles per day is one of the most viable sections for concessions. The toll road transverses Nairobi, Kenya’s capital city and regional economic hub for business, and is
the backbone of the Trunk Road System that links city bypasses and arterial roads to surrounding towns.
Scope of works
Phase 1

  • Construction of 4-lane overpass (viaduct) and a flyover (5.9 km).
  • Upgrading 2 km section to 8-lane dual carriageway
  • Construction of 2-lane frontage roads on both sides of the viaduct (6km)
  • Construction of facilities for non-motorized traffic and street lighting
  • Construction of two mainline toll plazas and ramp plazas

Phase 2

  • Extension of Dual Carriageway to Konza ICT City (7 km)
  • Upgrading of Interchanges at Airport North Road
  • Strengthening and capacity upgrades on existing 4-lane road section (27.2 km)
  •  Construction of remaining two Mainline and Ramp Plazas.
  • Government contribution
  • The government of Kenya is prepared/has made arrangements to provide the following enhancements to the project:
  •  Provision of Investment Guarantees
  • Tax Exemption during development Phases I and II
  • Financing for the Nairobi Southern Bypass
  • Upgrading Machakos Turnoff – Nairobi Airport
  • Provision of Land for Developments, ROW and Toll Plazas
  •  Relocation of Services and Utilities

(ii).  Privatization of Weighbridges

The management of weighbridges is being privatized to allow the private sector to play a bigger role. The thirteen (13) weighbridges countrywide plus other mobile weighbridges are scheduled to be under private management. Five of these weighbridges are static and strategically located in Mariakani, Gilgil, Athi River, Webuye and Isebania. Other mobile weighbridges are situated in Eldoret, Kisumu, Malaba, Juja, Busia, Mtwapa, Isinya and Mai-Mahiu. Operation and Management of the weighbridges are considered by the Government as an area that is ripe for private sector investment.