Roads board given go ahead to raise Sh800b through capital markets
Wednesday, February 26th, 2020
The government has approved amendments to the Kenya Roads Board Act to enable the organisation to raise Sh800 billion through bonds in the next five years to fund road works.
According to the Budget Policy Statement about Sh400 billion is required to finance backlog maintenance of roads with the additional Sh100 billion required annually to maintain the national roads network across the country.
“Under the Roads 10,000 Programme, more than 6,255.4 kilometres are at various stages of upgrading to bitumen standard at a cost of Sh283 billion,” the statement says
The report reveals that under the development budget, there is a funding shortfall of Sh300 billion annually under the medium-term expenditure framework (MTEF) budget.
It further reveals that more than Sh89 billion is required to clear outstanding pending bills owed to contractors. The additional funds raised, the statement says, will be used to address the funding gap in the road construction sector.
The roads are critical in opening up rural areas through increased accessibility thereby boosting socio-economic activities, security and integration between and among counties.
More than 4,000km of new roads, the BPS shows, have been completed through reconstruction and rehabilitation. It reveals that during the 2018/19 financial year more than 1,200km of roads were upgraded to bitumen standards. The Roads Maintenance Levy Fund (RMLF) has been used to fund more than 200,000km of roads over the last six years through periodic and routine maintenance.
“In FY2018/19, 2,100km of national roads were upgraded to bitumen standards while 41,000 km of national roads were maintained,” the report says.
In FY2019/20, 1,955km of roads are targeted for upgrading to bitumen standards through the High Traffic Roads (730km) and the Low Volume Seal Roads Programme (1,225km).