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Post Reply: Kenya to Pay Sh6.2 Billion to French Firms for Cancelled Nairobi-Nakuru Highway Deal

<blockquote><div class="quotetitle">Quote from <a class="profile-link highlight-moderator" href="https://lawguide.co.ke/understanding-law/legal-forum/profile/lawyer/">Lawyer</a> on May 8, 2025, 4:57 am</div><div id="pl-5277" class="panel-layout">
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<p dir="ltr" data-pm-slice="1 1 []">The Kenyan government will pay Sh6.2 billion in compensation to French firms following the cancellation of a Sh190 billion contract for the Nairobi-Nakuru-Mau Summit Toll Road project, sources confirmed. The decision to terminate the deal, initially signed in 2020, was driven by concerns over high toll fees and unfavorable financial terms, with the project now expected to be awarded to a Chinese contractor.</p>
<p dir="ltr">The agreement, formalized during a state visit to Paris by then-President Uhuru Kenyatta, involved a French consortium led by Vinci SA, including Vinci Highways, Vinci Concessions, and Meridiam SAS. The consortium was tasked with upgrading 140 km of the Nairobi-Nakuru highway into a multilane dual carriageway under a Public-Private Partnership (PPP) model. The project aimed to ease chronic traffic congestion on the vital Northern Corridor, connecting Kenya’s capital to western regions and neighboring countries like Uganda, Rwanda, and the Democratic Republic of Congo.</p>
<p dir="ltr">However, the Kenya National Highways Authority (KeNHA) raised issues with the contract, particularly the financial risk placed on the government due to potential low traffic volumes. KeNHA sought to renegotiate terms, but the French consortium deemed the proposed restructuring unfeasible, leading to a stalemate. In April 2024, the government formally cancelled the contract, citing toll fees deemed exorbitant—reportedly Sh780 for small cars and Sh6,500 for trucks over 175 km, far exceeding global standards.</p>
<p dir="ltr">The cancellation has not been without cost. The Sh6.2 billion compensation to the French firms reflects Kenya’s history of paying significant sums for terminated contracts, a recurring challenge in large infrastructure projects. Meanwhile, the project is poised to move forward with a Chinese contractor, following President William Ruto’s engagements with Chinese officials. During a bilateral meeting in Beijing in 2024, Ruto secured commitments for funding and construction discussions, signaling China’s growing role in Kenya’s infrastructure development.</p>
<p dir="ltr">This shift aligns with Kenya’s broader pivot toward Chinese investment, evident in projects like the Nairobi Expressway and the Mombasa-Naivasha Standard Gauge Railway. The Nairobi-Nakuru-Mau Summit highway, a critical artery handling 20,000 vehicles daily, remains a priority for the Ruto administration, which aims to complete the dualling in two phases: Nairobi to Nakuru, followed by Nakuru to Malaba.</p>
<p dir="ltr">Critics have questioned the cancellation’s timing and cost, with some alleging political motivations tied to the transition from Kenyatta’s administration to Ruto’s. Others argue the move prioritizes affordability for Kenyan motorists, as Ruto has expressed strong opposition to tolling models that burden citizens. The government has yet to disclose the new contract’s terms or the identity of the Chinese contractor, but officials emphasize the project’s urgency to boost economic activity, particularly in the Naivasha Special Economic Zone.</p>
<p dir="ltr">As Kenya navigates this transition, the compensation payout underscores the complexities of balancing infrastructure ambitions with fiscal responsibility. The Nairobi-Nakuru-Mau Summit highway’s completion will be closely watched as a test of the government’s ability to deliver cost-effective, high-impact projects.</p>

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