- President Ruto has released Ksh60 billion to pay contractors who had downed tools over pending bills.
- Most of the contractors are Chinese firms that left projects halfway.
- The funds were borrowed through a short-term facility from led by Trade and Development Bank.
- The road maintenance levy will be used to repay the loan, possibly leading to higher fuel prices.
President William Ruto has confirmed that the government has disbursed Ksh60 billion to settle debts owed to contractors, most of whom had abandoned major road projects due to unpaid dues. He made the announcement during a church service in Kapng’etik, Elgeyo Marakwet on Sunday, April 13.
The President explained that the payment marks the end of financial delays that had halted infrastructure development for over two years. The contractors are now expected to resume work in the coming days.
“In the past two years, the country has faced tough economic times. But in the last two weeks, we’ve paid Ksh60 billion to contractors. Many had abandoned roadworks midway — but from next week, they’ll be back to complete the jobs,” said Ruto.
Borrowed Money Behind the Relief
According to the National Treasury, the funds were secured through a loan package from several financial institutions, with Trade and Development Bank leading the deal. The loan is short-term and will be repaid using proceeds from the road maintenance levy, which is collected on fuel.
This arrangement could potentially affect fuel prices in the near future, as the levy might be adjusted upward to generate enough revenue to repay the loan.
Mbadi: We Owe Contractors Over Ksh175 Billion
Treasury Cabinet Secretary John Mbadi revealed that despite the Ksh60 billion disbursement, the government still owes contractors and landowners a total of Ksh175 billion. He added that the Treasury plans to float a bond by the end of June to raise another lump sum.
“There is urgency in restarting stalled road works across the country,” Mbadi stated during an interview with Bloomberg.
To ease pressure on the exchequer, the CS noted that contractors have been requested to forgo up to 50% of the interest accrued on delayed payments.
“We’ve asked them to take a haircut of 50% on the interest. The savings will go into funding roads that are near completion,” he added.
