By The Weekly Vision Business Desk
The Kenya National Highways Authority (KeNHA) is facing renewed scrutiny after the Auditor-General’s latest report revealed the irregular diversion of Sh7.31 billion from a securitised fuel levy fund to compensate a French consortium whose contract to upgrade the Nairobi–Nakuru–Mau Summit highway was terminated. The findings have reignited concerns over fiscal discipline, compliance with public finance laws and whether taxpayers received value for money.
The payment stems from a public-private partnership (PPP) agreement signed in September 2020 during former President Uhuru Kenyatta’s administration. Under the deal, a consortium comprising Vinci Highways SAS, Meridiam Infrastructure Africa Fund and Vinci Concessions SAS was awarded the contract to expand the Nairobi–Nakuru–Mau Summit (Rironi–Mau Summit) highway into a dual carriageway. The project was to be financed through a toll-road concession, with private investors recovering their investment from motorists over several decades.
However, after President William Ruto’s administration assumed office, the government reviewed the project and concluded that its long-term financial obligations would place an unsustainable burden on the country’s already strained public finances. Rather than risk lengthy arbitration proceedings before the London Court of International Arbitration and possible diplomatic repercussions, the government opted to terminate the agreement and compensate the French consortium.
The Auditor-General’s report on KeNHA found that the Sh7.31 billion compensation was paid from the securitised portion of the Road Maintenance Levy Fund (RMLF). The fund had been established as collateral for a financing programme intended solely to settle verified pending bills owed to local road contractors and to revive stalled infrastructure projects. According to the Auditor-General, the compensation paid to the French consortium did not qualify as a pending bill and therefore fell outside the securitisation facility’s intended purpose.
The report further noted that the payment was processed through an emergency expenditure authorised under Article 223 of the Constitution, before receiving retrospective approval through a supplementary budget. However, auditors observed that no satisfactory explanation had been provided for why the compensation was charged to the securitised fund, and concluded that the expenditure failed the value-for-money test.
The findings raise fresh concerns over the management of public infrastructure finances, particularly the diversion of funds earmarked for local contractors who have long complained of delayed payments. Industry stakeholders have repeatedly warned that unpaid bills have pushed many construction firms into financial distress, leading to job losses and stalled road projects across the country.
Following the cancellation of the original agreement, the government restructured the project and awarded the works to new investors. A consortium comprising China Road and Bridge Corporation (CRBC) and the National Social Security Fund (NSSF) took over part of the project, while Shandong Hi-Speed secured another section. The revised contracts have been valued at approximately Sh192.6 billion, although estimates vary depending on project scope and foreign exchange fluctuations.
Under the revised arrangement, the highway will operate under a user-pay tolling model, with motorists expected to pay approximately Sh8 per kilometre, subject to future adjustments. Unlike the previous agreement, the new structure shifts much of the demand risk to private investors while allowing the government to share in revenues exceeding agreed thresholds over the 30-year concession period.
Supporters of the revised project argue that it exposes taxpayers to less long-term financial risk and offers lower base toll charges than the original proposal. Construction has since progressed, with President William Ruto officially launching sections of the dualling works in late 2025.
Nevertheless, the Auditor-General’s findings underscore broader concerns about accountability in Kenya’s infrastructure sector. The report highlights the need for stronger safeguards to ensure that ring-fenced public funds are used strictly for their intended purposes, particularly where billions of shillings are involved.
The controversy also illustrates the high financial cost of changing course on major infrastructure projects after contracts have already been signed. While governments have a duty to protect public finances, such decisions can result in costly compensation payments that ultimately fall on taxpayers.
The Auditor-General’s observations are likely to intensify calls for greater transparency in the management of public-private partnerships, more rigorous project appraisal before contracts are awarded, and stricter oversight whenever projects are terminated or restructured.
Ultimately, the burden of these costly decisions is borne by ordinary Kenyans. Every shilling diverted from road maintenance or contractor payments represents money collected through the fuel levy paid by motorists, businesses and consumers. Without stronger financial controls and greater accountability, inefficiencies in public infrastructure projects will continue to exact a heavy price on Kenyan taxpayers.
