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Ruto administration puts more funds toward critical infrastructure development

Treasury Cabinet Secretary Prof. Njuguna Ndungu confirmed Thursday that President William Ruto’s government will continue to expand critical infrastructure across the country.

In his budget statement for the 2023/2024 Financial Year, the Treasury boss noted that the development of roads, railways, sea, and airports will create an enabling environment for economic recovery and employment creation.

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Towards this end, he proposed budget allocations of Ksh 244.9 billion, to support the construction of roads and bridges as well as their rehabilitation and maintenance. This figure is bigger than Ksh.212.5 that President Uhuru Kenyatta’s administration had set aside for the same in its final budget.

Allocations such as those of the Standard Gauge Railway, Lapsset, Dongo Kundu, and Nairobi Metro as well as the construction and expansion of airports and airstrips took this figure to a total budgetary allocation of Ksh 245.1 billion. Ruto rose this figure to Ksh 286 billion with funding set aside towards new projects such as Ksh 579 million for the Rehabilitation of Locomotives; and Ksh 889 million for the Development of Nairobi Railway City.

There is also the Ksh 1.1 billion allocated for the Nairobi Bus Rapid Transport Project; Ksh 300 million for the Acquisition of Ferries for Lake Victoria and the Smart Driving Licence which received Ksh 500 million.

At the same time, Ndungu announced budgetary allocations of Ksh 62.3 billion to support the production of reliable and affordable energy. Out of this, the Treasury CS indicated that Ksh 33.8 billion will cater for the National Grid System; Ksh 12.1 billion for Rural Electrification; Ksh 11.4 billion for Development of Geothermal Energy; and Ksh 3.2 billion for Alternative Energy Technologies.

And that’s not all. The CS told parliament that the National Treasury is in the process of developing a 10-year infrastructure plan that will be cross-cutting across various Ministries, to support the delivery and prioritization of projects.

He said the National Treasury plans to mobilize an estimated Ksh 100 billion in private sector capital through various priority sectors.

“The focus will be on priority investments and underlying key projects and programmes in each sector that deliver nationally significant infrastructure, drive growth, and unlock private investment with the greatest potential benefit to the Kenyan people,” he said

“These sectors will include airports, seaports, blue economy, water, agriculture, industrialization (SEZ), energy including transmission lines and digitalization among other key sectors in the economy,” the CS added

According to the CS, the inclusion of local goods, works and services will be emphasized for each project, to contribute to overall economic growth by encouraging local investments in PPP projects.

To achieve the PPP mandate of scaling up private sector capital, he said the National Treasury will leverage on the continued support from Development Partners as well as other key institutions both in the public and private sector including capital markets, pension funds, and commercial banks in scaling up private sector capital under the PPP framework.

“To ensure the sustainability of PPP projects, the Project Facilitation Fund (PFF) has been operationalised. The Fund will support project preparation, provide viability gap funding to projects as well as a source of liquidity to meet fiscal commitments and contingent liabilities that may arise from PPP projects,” he said

With the Fund in place and a robust legal and regulatory regime, he said the private sector has the necessary confidence and security to invest in PPP projects.

Indeed, in the last financial year, he disclosed that the National Treasury successfully mobilized Ksh 15 billion by achieving the financial closure of two clusters of urban roads projects under the Roads Annuity Programme.

“The projects are currently in the construction phase. Additional projects that have closed, include two renewable energy projects with a combined installed capacity of 70 MW,” he said

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