Murkomen proposes scrap of annuity road funding model, terms it expensive

Cabinet Secretary nominee for Roads, Transport, and Public works Kipchumba Murkomen says he will scrap off the Road Annuity Programme (RAP) should he be approved by the Committee on Appointments.

Murkomen said borrowing was preferable to investing resources in the program, which he termed expensive.

“The annuity program was the most unfortunate thing we ever implemented. If approved by this committee, I will scrap that program,” Murkomen said.

Murkomen told the committee that the Ngong-Kiserian-Isinya road and the 43km Kajiado-Imaroro stretch, cost KES 28 billion. Murkomen estimated that it would have cost KES 8 billion if built conventionally. He further stated that with annual maintenance costs of KES 500,000 per kilometer, the annuity program consumed KES 300 million.

Former President Uhuru Kenyatta launched the Roads Annuity Fund under the Public Finance Management Regulations, 2015.

The Fund was created to provide cash to cover the national government’s annuity payment obligations for RAP road development and maintenance. The Annuity Regulations state that withdrawals from the Fund may only be made to meet approved annuity payment obligations and operational expenses.

The initial objective of the government was to complete 2,000 kilometers of minor roads in the 2014/2015 fiscal year, followed by 3,000 kilometers in 2015/2016 made up of 80% small roads and 20% highways, and 5,000 kilometers in 2016/2017. Once finished, RAP would have nearly doubled Kenya’s asphalt surface roads from 14,000 km to 24,000 km, or 8.8% of the 161,451 km of classified highways.

However, RAP nearly failed in late 2015 due to concerns over inflated construction costs, with contractors quoting twice the Government’s budget for completing a kilometer of road. The government planned to invest roughly KES 25 million per km of rural road and between KES 50 million and KES 80 million per kilometer of urban and trunk roads.

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