The other side of road toll
Ongoing construction of the Nairobi Expressway.
What you need to know:
- The Nairobi Expressway toll rates are subject to adjustment as per the Consumer Price Index and Exchange Rate.
With the exception of foreigners, who will pay in dollars, the toll will be paid in local currency.
The Nairobi Expressway is, in less than a year, quickly unfolding from a concept to a towering piece of infrastructure which will soon be floating along one of Kenya’s busiest road corridors.
The first of its kind in the country, it has attracted public attention for the nature of its construction and how it will operate as a toll road.
This is an expression of faith by a foreign investor that the Sh59 billion project will give him a good return on investment: The investment is the road and the recovery of investment the toll. Like any other business, the investor will bear the revenue risk.
The Nairobi Expressway toll rates are subject to adjustment as per the Consumer Price Index and Exchange Rate. But market prices change, and this provision is given and recognised by the World Bank and IMF.
The investor is, in this case, guided by a strict procedural mechanism in the Public Roads Toll Act and adjustments will only become effective after approval and gazettement as per the law.
Keep in mind that there is an alternative for the Nairobi Expressway: Mombasa Road will remain as a free option for motorists. Therefore, it is upon the investor to keep the rates attractive for motorists to use. So, the investor will bear the demand risk.
Pay in dollars
With the exception of foreigners, who will pay in dollars, the toll will be paid in local currency.
Before investing in a project of such a massive scale, the investor must have determined two things. There is a problem: Motorists waste a lot of time and fuel in traffic, which could worsen. Willing buyers who need a willing seller: The toll rates translate to higher productivity, reduced vehicle maintenance costs and a better quality of life.
Among other benefits, the investor will employ 500 Kenyans to operate the toll road during the 27 years of operation and pay corporation tax.
Kenya is heading towards a more collaborative and less dependent approach to financing projects. Let us crack out of our shells and see what this world has to offer us and what we also have to offer.
