Jubilee must pursue this legacy defining Road Annuity programme

[RV Pundit]

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Under the model, contractors will access loans guaranteed by the National Treasury enabling them to design, construct and maintain the roads.

The National Treasury will then repay the loans in equal instalments (annuity) over eight years, starting from the time a given road is completed.

The banks are expected to lend up to Sh178 billion to finance the entire 10,000 kilometres of road expected to be completed in 2017.

Local banks seem not enthusiastic though

http://www.nation.co.ke/business/KCB-Co-op-Roads-Funding-Government/-/996/2652840/-/nfwikyz/-/index.html

The first 650 kilometres of the roads project is set to start next week after tenders are awarded next week on Friday.

[Mr Mansfield.]

That's how the Chinese,south Koreans,singapore and Americans built their infrastructure..leave everything to the private sector..its the same thing gov has done in energy..this move will create so many jobs,it will be an economic boom..what are the the interest rates?If the gov will be paying lets say 30BN annually we can manage to do even 20,000KMs,i hope kenyan banks,contractors and professionals are part of these projects,

Without Prejudice.

[RV Pundit]

Indeed. This is a simple innovative idea that will see us double the length of tarmacked roads. It unimaginable that 50yrs later we have about 10K tarmac road!If Jubilee deliver this...they will have managed to add 100Kms of tarmac in every const..and in 2017 will be unbeatable.

That's how the Chinese,south Koreans,singapore and Americans built their infrastructure..leave everything to the private sector..its the same thing gov has done in energy..this move will create so many jobs,it will be an economic boom..what are the the interest rates?If the gov will be paying lets say 30BN annually we can manage to do even 20,000KMs,i hope kenyan banks,contractors and professionals are part of these projects,

Without Prejudice.

[vooke]

Why are banks skeptical? The relative ambiguity of the program. Sounds like another impractical political junk

[Mr Mansfield.]

If Jubilee deliver this...

Not just national but also at the county level..In undeveloped and expansive counties like Garissa,Mandera,Wajir..if a governor is left with 2BN for development,he can only build murram roads or 40KM tarmac per year,but if he partners with banks,he can borrow 20BN in a  20 year concessional loan and build 400KM of roads in 2 years through mutua machakos model of awarding many local professionals and contractors..the model can also be replicated in building modern public markets,water dams in arid areas through joint ventures to  improve the quality of life,

Without Prejudice.

[RV Pundit]

I think the regulations and the setting up of the fund is at infancy to be dismissed that way. With treasury gurantee...why would bank refuse to lend...treasury will not default.

Why are banks skeptical? The relative ambiguity of the program. Sounds like another impractical political junk

[RVtitem]

That's how the Chinese,south Koreans,singapore and Americans built their infrastructure..leave everything to the private sector..its the same thing gov has done in energy..this move will create so many jobs,it will be an economic boom..what are the the interest rates?If the gov will be paying lets say 30BN annually we can manage to do even 20,000KMs,i hope kenyan banks,contractors and professionals are part of these projects,

Without Prejudice.

Did you say the Chinese??

Chinese government run corporations are the ones constructing our infrastructure. Does it mean the chinese government lets private sector build chinese roads but in africa it is the chinese gov shaping our roads.

[MOON Ki]

The idea is certainly a good one---in principle.  I see two problems with it in a place like Kenya:

(a) Government-guaranteed money means this will be a vehicle for eating, with very little actually done, if it is Kenyans supposed to do the doing.  People will no doubt remember this one:

"Prime Minister Raila Odinga has defended the massive presence of Chinese road contractors in Kenya, saying, they are here to fill the vacuum left by rogue contractors."

http://www.nation.co.ke/News/politics/Raila+defends+influx+of+Chinese+road+builders+/-/1064/1170196/-/15i6xfoz/-/

One might say that it doesn't matter who builds the roads.  I would disagree.   One of the things that such infrastructure projects should do is provide employment for locals; indeed, government all over the world have learned from that when initiating large infrastructure projects.    Having Chinese build roads is hardly helping with Kenyan unemployment.

(b) Even after the roads are built, maintenance will be a huge problem: we do not have a culture of maintenance---in anything.    The tradition is that instead of filling small holes as they appear, people wait until the road is completely ruined and then start as though they were building a new road.

If such issues can be dealt with, the idea could work, and it would be a great one.