Local cement manufacturer Savannah Cement has expressed an interest to join pre-qualified road contractors as a materials supplier in the new KES 260bn annuity financing program.
The program, which is expected to start in January next year will see a pool of 49 shortlisted road construction contractors starting work to develop the first phase of a projected 10,000 Kms of tarmacked roads in the next 5 years.
Under the annuity program, the government will negotiate uniform loans from banks while the contractors will design, build and maintain the roads. The first phase of the programme will cover a projected 2,000 kms at an estimated cost of KES 40bn and is expected to act as a pilot for the new alternative road construction financing model.
By expressing commitment to partner with the shortlisted contractors, Savannah Cement becomes the first and major materials supplier to firmly endorse the new road construction financing model.
Speaking during an Institution of Engineers of Kenya (IEK) symposium on annuity financed road projects, Savannah Cement Managing Director Ronald Ndegwa said the firm will be on hand to support the prequalified contractors through the supply of specially formulated road construction cement products.
Mr. Ndegwa said Savannah Cement will also provide technical support and logistics solutions to the contractors to guarantee cost efficiencies.
“As a key materials supplier, Savannah Cement acknowledges that existing infrastructure funding gaps can be drastically reduced by eliminating inefficiencies and adoption of appropriate technologies and financing strategies such as the annuity programme,” said Mr. Ndegwa.
He said his company has already a Hydraulic Road Binder (HRB) to be used in stabilization of soils and gravels in road construction projects, leading to a 30pc cost savings in stabilization costs.
The company recently undertook to produce market driven products in a collaborative partnership with local building and construction professionals.
The company has also grown a war chest of US$ 300mn to grow its local and regional market share by building a clinker manufacturing facility and commissioning the second grinding plant at its production complex near Kitengela township.
The cement maker has already invested more than US$100million to develop one of the most advanced and ecofriendly cement manufacturing plants in sub-Sahara Africa with a 1.5million tons annual production capacity.