Government to pocket 60pc of excess profits from Rironi-Mau Summit PPP toll road

The government will receive 60 percent of excess profits from the Rironi–Mau Summit toll road. This arrangement aims to limit the Chinese firm’s potential for excessive earnings during the 30-year concession period.

The National Treasury has set the profit share mechanism. Owners of the road will transfer 60 percent of earnings above an agreed 16 percent internal rate of return on equity to the State.

This model allows part of the toll fees to be reinvested into maintenance and upgrading of the 236-kilometre highway. It also enables the government to benefit from project proceeds throughout the concession without bearing certain risks.

A consortium involving China Road and Bridge Corporation and the National Social Security Fund handles construction of sections from Nairobi to Gilgil via Naivasha and Nairobi to Naivasha through Maai Mahiu. Another Chinese firm, Shandong Hi-Speed Road and Bridge International Engineering, builds the stretch from Gilgil to Mau Summit.

Negotiations with the firms helped the government avoid a minimum revenue guarantee. This transfers demand and revenue risks fully to the private sector operators.

The profit cap approach differs from the Nairobi Expressway model. There the operator absorbs losses from low traffic but keeps all excess revenue when volumes exceed projections.

NSSF holds a Sh9.59 billion stake in the consortium with a 40 percent ownership split. The partners project an annual dollar return of about 13 percent on investment through user fees.

They fund the project with 25 percent equity of Sh23.97 billion and debt of Sh71.89 billion. NSSF contributes 40 percent of the equity component.

The Rironi–Mau Summit toll project was launched by President William Ruto in November 2025. Construction continues on the highway that serves as a key artery to Western Kenya and beyond.

Contractors shoulder risks related to construction costs and timelines. The State’s role focuses on land acquisition, regulatory approvals and oversight.

Tariffs will follow a regulatory formula based on economic conditions, traffic data and operating costs. The contract includes review intervals and rules for revenue reinvestment into upgrades.

An estimated 40,000 vehicles use the highway daily. Most are expected to become paying customers once tolling starts.

The project is expected to cut travel time significantly along the corridor. It eases congestion on the main route from Nairobi to Western Kenya, Uganda, Rwanda and the Democratic Republic of Congo.