Three Decades of Tax Immunity for The Sh180 Billion Mau Summit Toll Road

A contentious proposal for sweeping fiscal concessions has emerged as a key feature of the monumental Rironi-Mau Summit Expressway project. The consortium selected to construct and operate the vital 175-kilometre road, comprising the China Road and Bridge Corporation(CRBC) and the National Social Security Fund(NSSF), has put forward a request for wide-ranging tax breaks. This ambitious infrastructure venture, estimated to cost a staggering Sh180 billion, is planned under a 30-year public-private partnership model designed to revolutionize transport along the crucial Northern Corridor.

The most significant element of the consortium’s plea is a potential 30-year tax exemption on the toll revenues collected from motorists. This unprecedented fiscal incentive is reportedly being sought to safeguard the financial viability of the massive undertaking and to maintain toll charges at accessible levels for users. The concessionaire argues that these breaks are necessary to de-risk the investment, especially since the consortium will bear the full traffic and revenue risk over the three-decade operating period. They are aiming to finance the project through a mix of 75 percent debt and 25 percent equity, with NSSF's involvement representing a substantial local investment in national infrastructure.

When the expressway opens, tentatively in 2028, passenger car motorists are expected to pay a base rate of Sh8 per kilometre. This toll is set to increase annually by a modest one percent to account for inflation and currency fluctuations. The project is strategically designed to dual the existing carriageway, including the construction of a major viaduct through Nakuru town to alleviate perennial urban congestion. While the toll road offers premium services and significant time savings, the government has committed to maintaining a free alternative route for drivers unwilling or unable to pay the toll.

The project proposal is currently undergoing intense negotiations with government agencies, focused heavily on securing these proposed tax exemptions, along with a letter of support to mitigate political and demand risks. Successful finalization of this agreement is crucial for the construction to commence on what is heralded as a defining infrastructure achievement. The government must balance the need to attract large-scale private investment with the imperative of protecting the national tax base from extensive fiscal waivers over the long term.