The Treasury’s directive that all major public projects must first be considered for Public-Private Partnership financing is understandable.
With the Budget Policy Statement showing 50 percent of ordinary revenue going to debt service in FY 2026/27, fiscal space is closed.
But Treasury’s own disclosures should give us pause. It recently revealed a Sh158.8 billion exposure in termination payments for road and solar PPPs. These are what taxpayers will pay if these projects collapse.
We have been here before. Under the Roads Annuity Programme launched to deliver 10,000km, only three roads totalling 172km were completed. Parliament heard the 91km Ngong-Kiserian-Isinya road will cost Sh28 billion under annuity versus Sh7-8 billion under conventional contracting.
The cost escalation – over 300 percent – is interest, profit and maintenance baked into the yearly payment.
The Roads PS told Parliament in April 2025 the annuity model has been abandoned as too expensive.
Yet we are now asked to embrace 51 projects valued Sh1.7 trillion under PPPs, with the Sh160 billion Rironi-Mau Summit toll road as flagship.
PPPs are not free. Kenyans pay through tolls and tariffs. Rironi-Mau Summit is already facing resistance because motorists already pay Road Maintenance Levy on fuel and will now pay again at the toll station.
We are not avoiding debt; we are deferring it to the toll station.
Unlike public debt which Parliament scrutinises monthly, PPP liabilities are hidden as contingent liabilities – off-balance sheet until they explode.
If these 51 projects must proceed, three safeguards are non-negotiable:
First, publish Value-for-Money tests before signing. Show that a Sh160 billion toll road is cheaper than government building it at Sh80 billion.
Second, publish all contingent liabilities in the Budget Policy Statement. Parliament cannot oversight Sh158.8 billion in hidden penalties it cannot see.
Third, ensure real public participation. The Adani-JKIA case proved Kenyans will not accept 30-year concessions negotiated behind closed doors that affect matatu fares and cost of living.
We need infrastructure, but not expensive shortcuts disguised as smart financing. If a road costs three times more under PPP, that is not innovation. It is fiscal illusion.