Usahihi Expressway: New details of the rejected Sh 468 billion PPP bid and what happens next

A summary of the rejected feasibility study for Kenya's proposed Nairobi-Mombasa Expressway has come to light, shedding details on a major infrastructure bid that stalled last year. The document, prepared by private investor Everstrong Capital, outlined a public-private partnership to build a high-speed toll road along one of East Africa's busiest corridors. Submitted in May 2025, it was turned down by the Kenya National Highways Authority two months later.

KeNHA cited failure to meet required criteria as the reason for rejection. In place of the new expressway, the authority recommended widening the current A8 highway. The Public-Private Partnership committee echoed concerns, noting that the original technical partner, Portuguese construction firm Mota-Engil, had withdrawn without a replacement. Committee members also warned about land speculation driving up costs along the route, which could lead to higher tolls passed on to drivers.

Everstrong Capital, operating through its Kenyan subsidiary, framed the project as a design-build-finance-operate-maintain setup with no government guarantees involved. This kept the venture off public balance sheets, avoiding impacts on national debt. A special purpose vehicle named Usahihi Expressway Ltd would handle execution. The timeline called for four years of construction starting in the first quarter of 2026, with initial sections opening in early 2029 and the full road ready by early 2030. Plans included assigning five engineering contractors to different segments and selecting an operator for maintenance before financial close, targeted for the end of the last quarter.
The technical scope described a 444-kilometer expressway plus upgrades to 15 kilometers of the A8. It would run from Mlolongo, at the end of the existing Nairobi Expressway, to Bonje Interchange near Mombasa.

The design specified a dual carriageway with two lanes in each direction, expandable to three. Infrastructure elements encompassed around 550 culverts, more than 40 bridges, and over 70 underpasses or overpasses. Pavement materials would vary: asphalt for most flat sections, concrete for steeper areas around escarpments. 

Legal provisions in the study proposed restricting heavy vehicles from the old A8 to steer them toward the toll road. Toll rates could adjust for external disruptions under defined risk-sharing rules. The alignment crosses Tsavo National Park, forest reserves, and community lands, necessitating a dedicated legal framework for management. Early termination by the government would require compensation covering outstanding debt, equity, and projected earnings. As a project of national importance, tax relief was suggested, including full investment allowances, exemptions from withholding tax, value-added tax, import duties, pay-as-you-earn for nonresident employees, stamp duty, and capital gains on asset transfers.
Financial projections pegged the total cost at KSh 468 billion, including KSh 318 billion for construction alongside land, fees, and reserves. Debt financing amounted to KSh 317 billion from commercial banks, development finance institutions, the U.S. Export-Import Bank, and local lenders. Equity stood at KSh 151 billion from shareholders and subordinated loans. Arrangers included J.P. Morgan for global aspects, Stanbic for regional, and CPF for local. Models showed a debt service coverage ratio averaging 2.09 times, with cash flows holding steady even in maintenance periods. Shareholder returns would start in year five through interest on loans, shifting to dividends after senior debt repayment. Stress tests confirmed viability under varying traffic levels.

Tolls were set to begin in 2029 at a base rate of KSh 12 per kilometer for mid-sized vehicles. Heavy trucks, classes five and six, would generate 85 percent of revenue. Rates would link to U.S. consumer price index to offset currency risks and build investor trust. Equity returns after tax were forecasted at 17.5 percent, with overall project return at 14.7 percent. Economic net present value reached KSh 331 billion, yielding a 13.5 percent return against a 6.65 percent discount rate.

The study highlighted economic gains, such as fostering new towns via a masterplan with special planning rights along the corridor. Special economic zones could attract KSh 1.14 trillion in foreign direct investment and increase exports by over KSh 2.6 trillion yearly through better logistics and ties to the African Continental Free Trade Area. Travel time would drop by five hours, reducing congestion on the A8 and cutting vehicle costs. Safety improvements could lower fatalities. Employment figures included 19,000 jobs during construction and 600 permanent positions afterward.

This route forms the backbone of Kenya's transport network. The A8 highway links Mombasa's port, Africa's second-busiest after Durban, to Nairobi and extends into Uganda and beyond as part of the Northern Corridor. Freight volumes have grown with regional trade, but bottlenecks persist. The Standard Gauge Railway, launched in 2017 for passengers and extended for cargo, has eased some pressure, yet roads handle the majority of flexible shipments.

The environmental impact assessment offered solutions for protected areas, though implementation would demand close monitoring. The summary's author, a construction project manager, questioned KeNHA's alternative, arguing it falls short on capacity and safety compared to a controlled-access road. Mota-Engil's exit undermined credibility, while land cost hikes and toll indexing could fuel affordability debates, especially with forced truck diversions.

As of January 2026, Everstrong is preparing to resubmit the report, sticking to the expressway plan over KeNHA's upgrade idea. The original document remains unpublished by the authority, despite legal requirements. Kenya's PPP laws aim to leverage private funds for big projects, as seen with the Nairobi Expressway completed in 2022 under Chinese operation. Debates on tolls there highlight ongoing tensions between investment and public access. Stakeholders in trade and logistics continue monitoring, given the corridor's role in East African commerce. For now, the A8 remains the primary link.

Original thread: CPM Mwangi/X