Road projects to boost Kenya cement consumption

Road construction
Road construction. Kenya plans to build a 10,000 km road network. PHOTO/FILE
Demand for cement in Kenya is expected to rise exponentially over the next three years, thanks to a plan by the State to build a 10,000 km road network to open up remote areas in the country.

Officials reckon that the construction of the initial 2,000 km of rural roads, which is scheduled to begin in December, will consume about 60,000 tonnes of cement, 15,000 tonnes of lime and 80 million litres of bitumen.

The Sh260 billion-project, whose bidding closed on August 29, is also expected to be a major boon for steel and iron producers.

“It will take high level contractors to manage about 30 major contracts packaged in lots, and about 400 other smaller contracts,” said the Kenya Rural Roads Authority director general Mwangi Maingi.

Data from the Kenya National Bureau of Statistics show that cement consumption stood at 5.05 million tonnes last year against a production level of five million tonnes.

The government has adopted a new financing model dubbed annuity concessions where contractors will borrow money from local commercial banks to implement projects with the Treasury acting as a guarantor.

Under the new model, a contractor will design, construct, finance and maintain the road for 10 years before handing it over to the government.

This is aimed at improving efficiency among local contractors while ensuring availability of funds to prevent time and cost overruns that have been experienced in the past.

In addition to accelerating the pace of infrastructural development in the country, the annuity model will see the government transfer construction, operation and maintenance risks to the private sector.

Road construction in Kenya has for decades lagged due to cash shortfalls, with only a partly 14,000km or 8.7 per cent of the total road network being tarmacked.