Tuesday, 3 June, 2025
Roads PS appears before Committee on Public Debt and Privatization over status of 15 CDB road infrastructure loans
Parliament BuildingsTuesday 3rd June, 2025
The Principal Secretary for State Department of Roads has appeared before the National Assembly Committee on Public Debt and Privatization to discuss the status of 15 loans provided by China Development Bank (CDB) for various road infrastructure projects across the Country.
Led by the Chairperson, Hon. Abdi Shurie (Balambala) the Committee asked PS Eng. Joseph Mbugua to furnish it with information relating to the achievement of the key performance indicators of the projects and the project appraisal and evaluation reports.
The Committee heard that the semi-concessional loans amounting to Kshs 35.6 billion and which each carry an annual interest rate of 4 per cent with an upfront charge of 0.5 per cent of the total facility amount and a grace period of three years, is effective but has not been disbursed.
The PS started that this was due to the rationalization of the Development Partner provisions under 2nd Supplementary budget 2024/25 resulting to nil allocations under the CDB Loan AIA. owing to lack of budgets, the National Treasury would not be able to forward the payments to CDB.
On what necessitated the government to contract such a huge loan from the CDB, the PS told the Committee the State Department has huge pending Bills and project portfolio which stood at Kshs 166.8 billion as at 1st July 2024. Further disclosing that, added to the Bill was an outstanding portfolio of approximately Kshs 800 billion chargeable to the GoK.
“Owing to the huge GoK Commitment vis a vis the amount of GoK resources available, the Government sought ways to seek alternative financing to relieve the exchequer from strain and also alleviate the negative consequences of the pending bills,” the PS said.
The 15 loan agreements for each of the 15 projects were signed on 6th September 2024.