An American firm has lost its legal fight to salvage the proposed Sh468 billion Nairobi-Mombasa toll expressway contract after a tribunal upheld the State’s decision to cancel the project over the company’s financial and technical weaknesses.
The legal battle highlighted China-US rivalry after Kenya cited the American firm’s reluctance to work with a Beijing-backed firm as a reason for terminating the mega deal.
Everstrong Capital had moved to the Public Private Partnership Petition Committee seeking to overturn the rejection of its privately initiated proposal to build and operate the 419-kilometre highway, dubbed Usahihi Nairobi-Mombasa Expressway.
But the tribunal dismissed the petition, ruling that the project failed to meet key thresholds on financial capacity, technical feasibility and overall viability under the Public Private Partnerships Act. At the centre of the collapse was the investor’s inability to demonstrate adequate financial muscle after dropping construction company, Mota-Engil, from the deal.
Mota-Engil’s exit stripped the project of a cornerstone investor expected to provide both equity financing and technical expertise, raising red flags about the project’s bankability, filings at the tribunal showed.
Mota-Engil is 40 percent owned by the Mota family and 32.41 percent by China Communications Construction Company (CCCC), the parent of China Road and Bridge Corporation, which built the standard gauge railway (SGR).
American lenders backing Everstrong opted not to fund the mega highway because of the Chinese links in Mota-Engil.
A bigger highway between Mombasa and Nairobi has been on the wish list of successive governments aiming to ease congestion on the busy road to and from the country’s major port.
Filings at the tribunal show that Everstrong’s proposal had initially advanced to the project development phase on the strength of its partnership with the Portuguese contractor Mota-Engil.
However, documents later submitted indicated that Mota-Engil had exited the consortium, stripping the project of a key technical and financial partner.
The filings further state that Everstrong had not demonstrated prior experience in delivering projects of similar scale and complexity, and that the loss of Mota-Engil cast doubt on its ability to raise equity, with its financial position deemed insufficient to support the multi-billion shilling venture.
Mota-Engil has developed construction projects in around 50 countries, including roads, motorways, railways, airports, ports and dams.
Everstrong was aggrieved by the PPP Committee’s March 9 decision to reject its proposed project, claiming talks with the State gave it the confidence the deal would be approved, in what is referred to as legitimate expectation.
The firm argued that the authorities went ahead to initiate a separate procurement for transaction advisory services for fresh feasibility studies, despite Everstrong’s pending proposal.
In its petition dated April 1, 2026, Everstrong claimed the decision breached constitutional and statutory provisions, including principles of fairness, transparency and good faith, as well as its legitimate expectation.
It maintained that the actions of the Public Private Partnership (PPP) Directorate and the Kenya National Highways Authority (KeNHA) were unlawful, procedurally unfair, unreasonable and irrational, and in violation of both the Constitution and the Public Private Partnerships Act.
However, the tribunal noted that the investor failed to replace the Portuguese contractor with a partner of similar financial and technical standing, weakening its ability to deliver a project of such scale.
State agencies, the PPP Directorate and the PPP Committee, flagged concerns that the firm could not prove sufficient equity contribution or demonstrate its capacity to raise funds, a key requirement before approval of any PPP project.
‘The evaluation process was structured, multi-layered, and based on statutory criteria,’ the tribunal said, adding that the investor had failed to show any procedural breach.
The proposal had initially received conditional approval in 2023 and proceeded to the project development phase, where Everstrong was required to submit detailed feasibility studies.
However, the initial feasibility studies submitted in May 2025 failed to meet statutory criteria, prompting the government in July 2025 to direct a restructuring of the project from a greenfield highway to an expansion of the existing Mombasa Road corridor.
Everstrong submitted a revised plan in January 2026, but the tribunal found that the reworked proposal still fell short on critical benchmarks.
Authorities cited weak technical documentation, unresolved legal and land issues, and gaps in financial modelling as reasons for rejecting the plan.
The seven-member tribunal chaired by Stephen Odhiambo Anditi upheld this position, finding that the project did not meet the requirements of technical, financial, social and environmental feasibility.
Some of the agreements between Everstrong and Kenya coincided with President William Ruto’s visit to the United States in 2024, the first such state visit by a leader from sub-Saharan Africa since 2008.
Everstrong reckoned that the evaluation was rushed and unfair, claiming it was denied a proper hearing and that the outcome had been predetermined.
But the tribunal rejected this claim, noting that the process adhered to statutory timelines and that the investor had been given multiple opportunities to address concerns.
‘Following statutory timelines cannot, by itself, amount to unfairness,’ the tribunal said, adding that the firm had been granted extensions during the project development phase.
The investor also claimed it had a legitimate expectation that its revised proposal would be reconsidered after entering into a project development agreement with KeNHA.
However, the tribunal ruled that participation in the PPP process does not guarantee approval.
‘There was no clear or express representation that the proposal would be approved or proceed to implementation,’ the committee said.
Another major sticking point was the project’s cost structure and reliance on a greenfield model, which required acquiring land along a new corridor.
Officials estimated land acquisition costs at Sh12.9 billion, a burden that would be passed to motorists through toll charges.
Initial projections indicated drivers could pay Sh12 to Sh13 per kilometre, translating to more than Sh5,000 for a full trip between Nairobi and Mombasa.
The government deemed the toll levels unsustainable and opted to shift focus to upgrading the existing highway to avoid inflated land costs and speculation.
Everstrong had also sought policy guarantees, including forcing heavy trucks and long-distance buses to use the expressway to secure revenue.
Authorities declined to grant such concessions, citing potential backlash and conflicts with existing transport policies.
The tribunal further dismissed claims that a parallel procurement for transaction advisors indicated bias, ruling that the process was separate and lawful.
It concluded that the investor had not proved its case and dismissed the petition.