The Ministry of Roads has announced plans to raise Sh175 billion through the recently increased Fuel Levy, with the money set to clear pending bills and accrued interest owed to contractors by the end of December 2024.
Appearing before the National Assembly Committee on Implementation in Eldoret, Roads Principal Secretary Joseph Mbugua said the government had securitized the levy, which was raised by Sh7 in the last budget.
“You may remember that Parliament allowed us to increase the Fuel Levy by Sh7,” said Eng. Mbugua. “We securitized this to raise Sh175 billion, which we will use to settle all pending bills and interest accrued up to December 31, 2024.”
The PS was responding to questions from MPs on the implementation of recommendations from the Public Investment Committee’s report on the Kenya Rural Roads Authority’s financial statements.
During the session, lawmakers raised concerns over poor project management and the awarding of contracts to unqualified companies.
Committee Member Rael Kasiwai pointed to repeated findings by the Auditor General, including projects starting without approved environmental impact assessments, violation of procurement laws, and persistent pending bills.
“Your report is replete with observations related to projects having commenced without approved environmental impact assessment, pending bills, flaunting of procurement laws and delayed disbursements,” she noted. “How do you plan to address these issues to ensure that the Authority rises above this to deliver on its mandate?”
MP Lilian Siyoi expressed concern about contractors facing delays in compensation, saying many are forced to borrow money from banks to fund projects only to later learn there is no exchequer release.
“I sympathize with contractors whose compensation has delayed,” she said. “We need to come up with a law that ensures we only procure contractors for monies that we have.”
PS Mbugua admitted that advertising projects without available funds had worsened the situation. He pledged that going forward, new road projects would only commence once funds are received.
“Indeed, Hon. Members, the issues you are raising are the same issues that we are trying to address as a State Department,” he said. “We will explore commencement of road projects only when we have received monies into our accounts.”
Committee Chairperson Raphael Wanjala welcomed the move, noting that interest accrued on unpaid bills is consuming funds meant for new projects.
“Interests paid due to pending bills are eating into monies that could build new roads,” he said. “Why don’t we move the way we do with NG-CDF, where you only advertise when we have money in the accounts? Otherwise, we will not do any roads; we will just be paying interests.”
Wanjala also called for fairer distribution of road projects across constituencies, saying some regions have been sidelined for decades.
“Roads are majorly being constructed in only one part of Kenya, yet we are all paying taxes,” he said. “For 60 years, some Kenyans have been paying for road construction for others. Why not allocate an equal number of kilometers in every constituency?”
The issue of delayed compensation for Project Affected Persons (PAPs) was also raised by Hon. James Gimose. In response, PS Mbugua pledged that Sh36 billion from the secured funds would be set aside to clear compensation arrears before December.
“We began with settlement of pending bills for contractors but we are going to settle PAPs before December,” he assured MPs.
The Committee directed the State Department for Roads to only advertise road works when funds are available from the Exchequer, saying the move will help bring discipline, accountability, and fairness in road construction across the country.
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