Kenyans to incur more interest charges as state fails to pay Chinese contractors

Kenyans to incur more interest charges as state fails to pay Chinese contractors

The government has failed to pay Ksh.428.6 million to Chinese contractors who built the Thika Super Highway.

An audit done for the Kenya National Highways Authority (KeNHA) shows the pending bills to be Ksh. 428,623,554 as of June 30, 2021.

Auditor-General Nancy Gathungu stated that the penalty and interest burden will fall on taxpayers if the government fails to complete the payment.

“The project is at risk of incurring significant interest costs and penalties with the continued delay in making payments,” said Gathungu.

The superhighway project cost Ksh.32 billion and was completed by a  group of Chinese firms; China Wu Yi Company, Sinohydro Corporation and Sheng Li Engineering Construction. The road was funded by loans from the Africa Development Fund and China Exim Bank as well as the Treasury.

It was anticipated that the superhighway would help Kenya in realising its objective of attaining the status of a middle-income country by 2030.

The road project saw the construction of a modern superhighway which was first of its kind in Kenya and the construction ended in 2012 even though it was scheduled to end in 2015.

In 2012, one of the Chinese firms, Sinohydro Corporation protested over the government’s failure to pay Ksh.3billion for the job done. At the time, the Africa Development Bank (AfDB) and China Exim Bank had committed slightly more than 80 percent for the total project.

KeNHA is now obligated to release the funds, an increase of Ksh.726 million from the outstanding Ksh.2.9 billion in 2020.

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