State to Pay Road Contractors KSh 20 Billion as Pending Bills Get Cleared

The Ministry of Roads and Transport has confirmed that it will pay road contractors KSh 20 billion for works completed during the first quarter of 2026. This move comes as the government reports a total clearance of the industry's pending bills, which have historically weighed down the construction sector.

Principal Secretary Joseph Mbugua stated that the successful settlement of these debts was made possible through the securitisation of the Road Maintenance Levy Fund. This financing mechanism has allowed the state to bridge existing infrastructure funding gaps, ensuring that contractors are paid for their services on time.

The Road Maintenance Levy Fund is primarily funded by fuel levies collected at the pump. By securitising these future collections, the government has been able to unlock immediate capital to settle arrears, which had previously led to the stalling of several major projects across the country.

Industry analysts note that the persistent issue of unpaid bills has often forced contractors to abandon sites, leading to increased costs due to interest and preservation of works. The current payout is expected to provide much-needed liquidity to firms currently engaged in both routine maintenance and new road construction.

President Ruto has previously emphasised the need for fiscal discipline within the infrastructure department to avoid the accumulation of debt. The administration’s focus has shifted toward ensuring that every project launched has a clear, sustainable funding path to prevent the recurrence of stalled works.

The clearing of these bills is a significant development for local contractors, who often struggle with high borrowing costs while waiting for government disbursements. With the first-quarter payments now scheduled, many firms can plan for equipment upgrades and workforce retention without the threat of payment delays.

PS Mbugua noted that the innovative use of the levy fund provides a more stable foundation for the national road network's upkeep. This approach reduces reliance on the direct exchequer for every maintenance need, allowing for more predictable budget cycles within the ministry.

The KSh 20 billion allocation will cover various classes of roads, including those under the jurisdiction of the Kenya National Highways Authority and the Kenya Rural Roads Authority. The government intends to maintain this momentum to ensure that infrastructure targets for the current fiscal year are met without further financial hitches.

While the securitisation strategy has been effective in clearing the backlog, the ministry remains under pressure to ensure that new contracts do not exceed the available levy revenue. Moving forward, the focus will remain on high-impact projects that offer the best value for money for the Kenyan taxpayer.