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Post Reply: KeNHA Rejects US Firm's Nairobi-Mombasa Expressway Proposal, Cites Failure to Meet Key Criteria

<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 August 13, 2025, 6:00 am</div><div id="pl-7493"  class="panel-layout" ><div id="pg-7493-0"  class="panel-grid panel-no-style" ><div id="pgc-7493-0-0"  class="panel-grid-cell"  data-weight="1" ><div id="panel-7493-0-0-0" class="so-panel widget widget_sow-editor panel-first-child panel-last-child" data-index="0" data-style="{&quot;background_image_attachment&quot;:false,&quot;background_display&quot;:&quot;tile&quot;,&quot;background_image_size&quot;:&quot;full&quot;,&quot;background_image_opacity&quot;:&quot;100&quot;,&quot;border_thickness&quot;:&quot;1px&quot;}" ><div
			
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	<p dir="ltr" data-pm-slice="0 0 []">On August 12, 2025, the Kenya National Highways Authority (KeNHA) announced the rejection of a Public Private Partnership (PPP) proposal submitted by Everstrong Capital, a United States-based infrastructure firm, for the construction of the Nairobi-Mombasa Expressway, named Usahihi Expressway. The decision, made by the PPP Committee of the National Treasury and Economic Planning during its 54th Ordinary meeting on July 2, 2025, was based on the proposal's failure to meet critical evaluation criteria outlined in the PPP Act of 2021. This development has sparked significant discussion, as the ambitious 440-kilometer, four-lane dual carriageway project was poised to transform travel between Kenya’s two largest cities, Nairobi and Mombasa, by reducing travel time from over ten hours to approximately four and a half hours.</p>
<p dir="ltr">The Usahihi Expressway, named after the Kiswahili word for "done correctly," was envisioned as a landmark infrastructure project in Kenya. The proposed 459-kilometer toll road, designed as a greenfield project, aimed to alleviate congestion on the existing Nairobi-Mombasa highway, enhance regional connectivity, and boost economic activity by facilitating faster and safer travel for trucks, buses, and automobiles. The project was expected to cost approximately 468 billion Kenyan Shillings (about 3.6 billion USD), with funding to be sourced from international investors, development agencies, Kenyan pension funds, and private investors through a consortium led by CPF Capital &amp; Advisory Ltd., known as the PACK Hunters Club.</p>
<p dir="ltr">Everstrong Capital, in partnership with lead arrangers Standard Bank Group and JP Morgan, submitted a comprehensive 2,300-page feasibility study to KeNHA on May 28, 2025. The study covered technical, legal, financial, environmental, and social aspects of the project, with Everstrong's Senior Advisor, Kyle McCarter, a former US Ambassador to Kenya, describing it as the most detailed and transparent feasibility report ever submitted to KeNHA. The project was marketed as a model for sustainable and inclusive infrastructure, featuring rest stops, wildlife observation points, electric vehicle charging stations powered by renewable energy, and overpasses designed to accommodate animal migration patterns.</p>
<p dir="ltr">The expressway was planned to be a four-to-six-lane dual carriageway with seven toll stations, operated and maintained by Everstrong Capital for 30 years, including a construction period of three to four years. Toll fees were estimated at 12 to 13 Kenyan Shillings per kilometer, lower than the 18 Shillings per kilometer charged on the existing Nairobi Expressway. The total cost for a full trip between Nairobi and Mombasa was projected at approximately 5,280 Shillings, with potential for lower rates if construction costs were optimized. Additionally, the project included a 100 million USD (approximately 12.9 billion Shillings) budget for land acquisition, as the Kenyan government would not provide land for the project.</p>
<p dir="ltr">KeNHA’s decision to reject Everstrong Capital’s proposal stemmed from the PPP Committee’s determination that the Project Development Report (PDR) did not meet the required standards under Section 43 (11) (c) of the PPP Act, 2021. While specific details of the unmet criteria were not disclosed in the public statement, KeNHA emphasized that the decision followed a thorough review process. The authority noted that the rejection aligns with its commitment to adhering strictly to the provisions of the PPP Act, ensuring transparency and accountability in infrastructure development.</p>
<p dir="ltr">Despite the rejection, KeNHA has not closed the door on the project entirely. The authority has encouraged Everstrong Capital to revise and restructure the proposal to meet the required standards. Specifically, KeNHA suggested that the firm consider expanding the existing Nairobi-Mombasa highway rather than constructing a new greenfield expressway. This adjustment could address some of the concerns raised during the evaluation process. Everstrong Capital has been invited to resubmit the revised proposal for fresh consideration under Section 43 (12) of the PPP Act, 2021.</p>
<p dir="ltr">Following reports of the project’s rejection, Usahihi Expressway Limited, the entity overseeing the project, issued a statement on July 11, 2025, clarifying that the feasibility studies are still under review by KeNHA, the PPP Directorate, and the National Treasury. The company refuted claims that the government had been directed to suspend the project, calling such reports inaccurate. Usahihi Expressway Limited emphasized its commitment to transparency and collaboration with relevant government bodies, promising to provide official updates through appropriate channels as the review process continues.</p>
<p dir="ltr">Kyle McCarter, speaking during the submission of the feasibility study in May 2025, had expressed confidence in the project’s readiness, stating that it was "investment-ready and execution-worthy." He highlighted the potential economic benefits, including thousands of job opportunities, enhanced trade routes, and improved regional connectivity. The rejection, however, has raised questions about the project’s feasibility and the specific shortcomings in the proposal that led to the PPP Committee’s decision.</p>
<p dir="ltr">The Nairobi-Mombasa Expressway has been in discussion since at least 2017, with earlier attempts to initiate the project facing significant hurdles. In 2018, the project was initially slated for development by US firm Bechtel in collaboration with Everstrong Capital, with an estimated cost of 300 billion Shillings. However, disagreements over funding models led to the collapse of that deal. Bechtel had proposed that the Kenyan government fully fund the construction upfront, while the government preferred a PPP model where the contractor would finance the project and recover costs through toll fees. Bechtel argued that the PPP approach would inflate costs to 1.9 trillion Shillings (approximately 15 billion USD) and delay completion.</p>
<p dir="ltr">In 2023, the project was revived under Everstrong Capital’s leadership, with first-stage approval granted by the National Treasury for the PPP model. This approval allowed the project to advance to the feasibility study phase, culminating in the submission of the 2,300-page report in May 2025. Despite the current setback, the project’s history reflects persistent efforts to address Kenya’s infrastructure needs and the complexities of financing large-scale projects through public-private partnerships.</p>
<p dir="ltr">The rejection of Everstrong Capital’s proposal represents a significant setback for the Usahihi Expressway, which was touted as a transformative project for Kenya’s transport infrastructure. The expressway was expected to decongest the existing Nairobi-Mombasa highway, reduce travel time, and support economic growth by improving access to the Port of Mombasa, a key trade hub. The project also aimed to set a new standard for sustainable and community-centered development, with features like wildlife corridors and renewable energy infrastructure.</p>
<p dir="ltr">KeNHA’s call for a revised proposal suggests that the project could still move forward if Everstrong Capital addresses the identified deficiencies. The recommendation to expand the existing highway rather than build a new one may indicate concerns about cost, environmental impact, or land acquisition challenges associated with the greenfield approach. The revised proposal will need to align with the PPP Act’s requirements and demonstrate financial and technical viability to secure approval.</p>
<p dir="ltr">In contrast, the National Treasury has recently approved two Privately Initiated Proposals (PIPs) for the Nairobi-Nakuru-Mau Summit Road project, also contracted by KeNHA. This development highlights the government’s ongoing commitment to infrastructure development through PPPs, even as the Nairobi-Mombasa Expressway faces delays.</p>
<p dir="ltr">KeNHA has underscored its commitment to transparency in disclosing the reasons for the rejection, aligning with the government’s broader goal of maintaining accountability in public-private partnerships. The authority has assured the public that it will continue to adhere to the PPP Act, 2021, and provide updates on the project’s progress. As Everstrong Capital prepares to revise its proposal, stakeholders, including investors, contractors, and the public, will be closely watching the next steps in this high-profile infrastructure initiative.</p>
<p dir="ltr">The Nairobi-Mombasa Expressway remains a critical project for Kenya’s economic and infrastructural development. Its successful completion could position Kenya as a leader in sustainable infrastructure in Africa, but the path forward will require careful alignment with regulatory standards and robust collaboration between the government and private partners.</p>
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