Road Contractors Get 40pc Extra In Pending Bills Clearance

NAIROBI, Kenya, Jul 29 – President William Ruto’s Cabinet has approved the release of up to 80 per cent of verified road contractor claims, doubling the earlier 40 per cent settlement in a move expected to unlock stalled projects, ease cash flow for contractors, and fast-track infrastructure development nationwide.

The government will draw the additional payout from funds raised through the securitization of the Road Maintenance Levy Fund (RMLF), a financing model that has already disbursed Sh64.2 billion, clearing 40 per cent of pending bills tied to 575 contracts covering 393 projects.

Under the new directive, contractors receiving the extended payout must allow an additional 120 days for the final settlement, giving the government time to mobilize the remaining funds.

The decision builds on a controversial financing model that Roads and Transport Cabinet Secretary Davis Chirchir defended, insisting that the securitization of the levy is legal, transparent, and fiscally responsible.

In a July 16 statement, Chirchir explained that the government turned to securitization to raise Sh175 billion to pay off verified pending bills inherited from the previous administration, which had stalled over 580 road projects across the country.

“This decision was made transparently, with full adherence to the law, and in line with best financial practices,” Chirchir said, dismissing claims that the government had plunged the country into fresh debt.

He clarified that the model does not constitute new borrowing but involves the sale of rights by the Kenya Roads Board to a Special Purpose Vehicle (SPV) to receive Sh7 out of the current Sh25 per litre road levy, ensuring upfront financing without creating additional liabilities.

Public concern

The securitization approach sparked public debate, particularly after Kiharu MP Ndindi Nyoro alleged that the government used the levy as collateral for what he termed an “illegal debt.”

Chirchir dismissed the claims, emphasizing that the process underwent due diligence and received clearance from both the National Treasury and the Attorney General.

A recent spike in fuel prices fueled the controversy, with the Energy and Petroleum Regulatory Authority (EPRA) announcing increases of Sh8.99 for petrol, Sh8.67 for diesel, and Sh9.65 for kerosene in its July–August review.

Energy Cabinet Secretary Opiyo Wandayi clarified that global oil price fluctuations, not the securitization model, drove the price hikes urging Kenyans not to conflate the two issues.

Tuesday’s Cabinet meeting also approved a range of measures aimed at stimulating economic growth, including the partial privatisation of the Kenya Pipeline Company (KPC) to modernize operations and democratize ownership, and the greenlighting of Phase III of the Last Mile Connectivity Project, which will connect 180,500 new households, schools, and MSMEs to electricity.

Cabinetsaid the roads payout decision, combined with these other measures, would “resolve long-standing financial obligations, restart critical projects, and drive economic recovery across multiple sectors.”