Kenya faces Sh180.7 billion liability risk from highway projects

The National Treasury’s draft 2027 Budget Policy Statement has identified significant potential liabilities stemming from the premature termination of public-private partnership (PPP) agreements. A major highway project accounts for nearly 44 per cent of the Sh413.81 billion in total potential liabilities.

Specifically, cancelling contracts for the Rironi–Naivasha–Gilgil and Rironi–Mai Mahiu–Naivasha sections could trigger compensation of Sh93.38 billion, while the Gilgil–Nakuru–Mau Summit section carries a potential liability of Sh87.35 billion. These projects involve Chinese contractors, including China Road and Bridge Corporation and Shandong Road and Bridge International, under 30-year arrangements.

Other identified fiscal exposures include the Nairobi Expressway, with a potential termination liability of Sh72.04 billion, and a smart driving licence project estimated at Sh50.22 billion. The Treasury noted that these figures represent maximum possible exposure rather than immediate required payments, and simultaneous termination of all projects is considered unlikely.