Govt Plan to Toll Major Highways Enters Public Participation Phase

In Summary

• The draft Road Tolling Policy 2025 has entered the public participation phase - seeking to introduce road tolls to cover an annual Ksh253 billion  gap in the maintenance budget. Major roads targeted for tolls include Thika Highway, the Kenol-Marua Highway, the Southern Bypass, among others. 
• The Ministry of Health has been put on the spot over low absorption of billions allocated to the Social Health Authority (SHA), even as officials decried that SHA was not receiving enough funding. 
• Kenya Railways Corporation (KRC) has deferred its full takeover of SGR operations from Africa Star Railway Operation Company until December 2025, up from the initial June 2025 target. 
• The World Bank has inked a deal with Kenya where it will fund a Ksh10 billion project to deploy solar-powered mini-grids and stand-alone systems in parts of the countries that are not connected to the national grid.
• Chinese firms have emerged as dominant players in Kenya’s infrastructure sector, securing five key PPP deals valued at Ksh190 billion, including the Nairobi Expressway project by CRBC. This privately initiated model, bypassing competitive bidding, marks a shift towards greater reliance on private capital for major infrastructure projects.

In a report by the People Daily, the government has revived its plan to impose tolls on major roads to address a critical funding gap in road maintenance and development, amid fiscal challenges including a public debt of Ksh10.6 trillion. The draft Road Tolling Policy 2025, now subject to public consultations starting February 24, aims to generate sustainable revenue to cover an annual maintenance need of Ksh253 billion and a development shortfall of Ksh5.146 trillion over the next decade, as current collections from the Road Maintenance Levy Fund fall well short at Ksh100 billion. Following a High Court ruling that removed previous bans on tolling five key highways—including the Thika Superhighway and Nairobi Southern Bypass—the initiative seeks to ensure that road users contribute directly to infrastructure upkeep, with proposals for discounts to alleviate the financial burden on motorists.

The Ministry of Health has been put on the spot over low absorption of funds allocated to the Social Health Authority (SHA). The National Assembly’s Health Committee wanted ministry and SHA officials to explain the fact that only about 23 percent of the funds allocated to SHA’s Primary Health Care Fund and the Emergency and Chronic Fund has been spent. Out of the Ksh6.1 billion allocated to these funds, only Ksh1.44 billion has been utilised. The development comes even as the Ministry complained that SHA was not receiving enough funds to pay for medical bills. The Ministry of Medical Services had asked Parliament for Ksh426.8 billion for 2025/26 but received only Ksh172.6 billion, leaving a funding gap of Ksh254.2 billion. Medical Services PS Harry Kimtai warned that the shortfall, coupled with unfunded exchequer requests and the fallout from USAID funding cuts, is overstretching the department’s capacity to implement Universal Health Coverage and maintain critical hospital operations, with major facilities like Kenyatta National Hospital and Moi Teaching and Referral Hospital facing notable deficits as reported by the People Daily.

Kenya Railways Corporation (KRC) has deferred its full takeover of Standard Gauge Railway (SGR) operations from the Chinese firm Africa Star Railway Operation Company (Afristar) to December 2025, up from an earlier target of June 2025. KRC CEO Philip Mainga confirmed that the State agency has already assumed 98 per cent of the SGR functions—including security, passenger services, rolling stock management, and track maintenance—with only five functions remaining under Afristar. According to the Business Daily, the postponement is attributed to pending technical issues, such as ensuring locomotive safety, that need to be resolved before full control is achieved. Mainga also highlighted that the localization of staff has created 1,500 jobs, contributing to economic growth, even as the costly operation of the SGR—costing taxpayers an average of Ksh1 billion per month on the Mombasa-Nairobi line, alongside a Ksh324 billion loan repayment to Exim Bank of China—continues to draw public concern. 

Backed by the World Bank, Kenya has launched an extensive electrification programme aimed at achieving universal connectivity by 2030. According to The Star, President William Ruto witnessed the signing of 20 contracts worth Ksh10 billion for the development of 113 solar-powered mini-grids and 343 stand-alone solar systems, part of the Kenya Off-Grid Solar Access Project (KOSAP), a Ksh19.4 billion initiative. The project, implemented by the Ministry of Energy and Petroleum, Kenya Power, and REREC, will provide modern energy services to underserved counties including Turkana, Marsabit, Isiolo, Mandera, and others, with an additional Ksh438 million allocated for health facilities and administrative offices in 13 counties. This drive not only aims to spur socio-economic development and improve livelihoods but also builds on Kenya’s progress in increasing electricity access from 29 per cent in 2013 to 75 per cent today, in line with the country’s Vision 2030 and National Electrification Strategy.

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According to the Business Daily,Chinese firms have emerged as the dominant force in Kenya’s public-Private Partnerships (PPP) projects, with five key deals valued at Ksh190 billion—including the Nairobi Expressway built by CRBC at an estimated Ksh86.8 billion—highlighting their deep cash reserves and access to cheap loans from Beijing. This privately initiated proposal model, which bypasses competitive bidding, has enabled Chinese companies to outpace their US, UK, and Portuguese counterparts in a pipeline of 32 infrastructure projects aimed at reducing reliance on debt and taxes for building roads, airports, and power plants. Transitioning from traditional debt-funded mega projects like the Thika Superhighway and SGR, CRBC is now expanding into water supply and dam projects, while local firms secure deals worth Ksh184 billion in energy and food security, with seven projects already reaching financial close and mobilizing Ksh140.7 billion in private capital.