Chinese firm protests delay in payment for Kenya road project
Part of the Thika Highway under construction. Picture: File
The Chinese firm constructing Kenya’s Thika Road is protesting delayed payment of $29 million by the Kenyan government.
Sinohydro, a state-owned corporation, said it is yet to be paid funds for works on the second phase of Thika Superhighway forcing the company to use it own resources to complete the 14.1 kilometre section.
“We need the money to cover our operations. We have been forced to use our internal resources because we do not want to stop the works,” said Sinohydro Corporation senior official Song Qinggang.
The government has however attributed the delay to failure by the project engineers to forward the certificate of completion of works that will indicate the extent of the work done to enable release of the funds.
One of the project leaders attached to the Ministry of Roads who sought anonymity said some of the certificates of works submitted by Sinohydro Corporation have not yet been approved because of the delayed inspection of works and this is the cause of the payment delay.
The Kenya government has been facing a cash crunch because of the previously unplanned war in Somalia that is estimated to have cost the Treasury $270 million, until the Kenya Defence Forces rehatted to the African Union Mission in Somalia (Amisom).
Two lenders for the project, the Africa Development Bank and China Exim Bank had committed slightly more than 80 per cent for the total project cost estimated initially at $317 million. The Kenya government was to raise the remaining funds
But that remainder has been increasing, first by about $35 million because of the increase in cost of materials in the global market including oil prices, according to Treasury Permanent Secretary Joseph Kinyua.
“The delay must be on the Ministry of the Roads side because we have enough money to pay the contractors. May be the Ministry of Roads may have exhausted the government of Kenya funding component of the road but they are yet to let use know. If that may be the case, then the money should be paid in the month of July, because as we start the new financial year, ministries are required to prioritise outstanding payments payments to avoid starting off in debt,” said Mr Kinyua.
The total cost increase will be 20 per cent of the original project cost according to Hari Ramesh, chief resident Engineer for Nairobi-Thika Highway Improvement Project, increasing the financial burden for the Kenya government.
The delay in payment to Sinohydro is not however expected to affect the pace of the highway’s completion that is now at 97 per cent, company officials said last week.
