Kenyan is likely to about Ksh.158.8 on Nairobi Expressway and other projects if it terminates the contract it has with private firms constructing them.
The country will lose the said money if terminates the contracts it has with private companies working on various roads and solar power plants in the country.
The National Treasury revealed that there are about seven projects that are either operational or under implementation.
Some of those projects include the Nairobi Expressway, Selenkei SolarPower, Chania Green, Ngong-Kiserian-Isinya annuity road, Malindi Solar, Alten Solar, and Cedate Solar Power.
In addition to the seven, the country is also negotiating for a 175-kilometer Rironi-Nakuru-Mau Summit Highway.
If Kenya terminates their contracts with the developers of these projects, it might lose up to $1.4 billion.
Kenya is seeking to retain its spending on mega projects with its funding expected to come from private backers so that it reduces its borrowing and budget deficit.
The private investors will earn from charging user fees like toll charges for a period between 10 and 30 years. Analysts note that financing of the new infrastructure has been affected by governments guarantees and revenue sharing arrangements.
“The estimation of contingent liabilities for PPPs is conducted based on a worst-case scenario, i.e early termination of the PPP contract due to government default,” the Treasury said.
In case the government defaults with the payment of its current projects, the country will lose $510.9 in the energy sector and $926.7 million in the road sector.
The public-private partnership (PPP) has been used as an alternative way of financing expensive government projects.
The government has identified various sectors for the use of the PPPs. Those sectors include blue economy, water, and sanitation, housing, ports, rail, and power transmission among others.
