Treasury Issues Ultimatum to US Firm on Sh468bn Nairobi-Mombasa Expressway

The National Treasury has put American private equity firm Everstrong Capital on notice over its long-running proposal to build a new expressway between Nairobi and Mombasa. Treasury Cabinet Secretary John Mbadi confirmed the US investor has submitted a revised development report, now under review by the Kenya National Highways Authority.

If the document does not satisfy KeNHA’s mandatory evaluation criteria, the authority can declare the project abandoned under Sections 43(11)(c) and 43(12) of the PPP Act. In that event, the corridor would move to standard competitive procurement, opening the door to other bidders.

The Sh468 billion initiative, pitched as a privately initiated project under public-private partnership rules, envisions a four-lane, 419-kilometre toll road. Proponents argue it would slash travel time and costs along Kenya's busiest freight and passenger corridor, linking the capital to the port city.

The plan has faced repeated hurdles. Last year the PPP Committee rejected an earlier Project Development Report for failing to meet revised standards on affordability, public interest, and other factors. Concerns included uncertainty over land use, with initial ideas for a greenfield alignment requiring significant acquisition estimated at Sh12.9 billion. Officials pushed instead for upgrades along the existing Mombasa Road alignment to contain costs.

The Treasury’s PPP unit directed preparation of a fresh report to demonstrate bankability. Everstrong’s latest submission aims to address those gaps, covering aspects like technology, land ownership, environmental impact, and financial viability. Projected tolls stand at Sh12 to Sh13 per kilometre, translating to roughly Sh5,280 for a full trip, with higher rates for heavier commercial vehicles.

Mbadi stated the review will determine whether the proposal clears the threshold. Should it fall short, KeNHA holds discretion to end the process definitively. The project remains at the feasibility study stage, with no construction timeline in sight until viability is confirmed.

The Nairobi-Mombasa link carries massive economic weight, moving goods from the port inland and supporting tourism, agriculture, and manufacturing. Current travel often takes 8-10 hours due to congestion, accidents, and single-lane sections in parts. A new expressway has been discussed for years, including a shelved 2017 deal with Bechtel that raised debt worries.

Everstrong, partnered locally in earlier phases, positioned the scheme as a major PPP on the continent. Government insistence on rigorous checks reflects caution over toll affordability and fiscal exposure in similar deals.

The ultimatum follows months of back-and-forth after the PPP Committee’s rejection. If abandoned, competitive tendering would likely attract international consortia, though past mega-road PPPs in Kenya have struggled with financing and execution.

Officials have stressed protecting public interest in any final decision on this corridor.