[Client Impact]

Independent Oversight on 35 km of PPP Roads

[Client Impact]

Independent Oversight on 35 km of PPP Roads

Client

KURA

Location

Western Kenya
KES 595.6M

Duration

2025 - 2032 (Active)
Overview

KURA's Contractor-Facilitated Financing programme is one of the most significant infrastructure financing innovations in Kenya's roads sector. Private contractors finance, design, build, and maintain road infrastructure under a Finance, Design, Build, Maintain and Transfer arrangement. The government pays for performance, not construction, through availability and performance-based payments over the O&M period. The Independent Engineer is what makes that accountability mechanism function. Without rigorous, independent performance verification, performance-based payments become time-based payments, and the model loses its entire economic logic.

ACAL was appointed by KURA as Independent Engineer for the Lot 18 Operation and Maintenance phase, covering 35.1 kilometres of town roads across Vihiga, Bungoma, Kakamega, and Busia Counties. The engagement, valued at KES 595.6 million, began in June 2025 and runs through June 2032.

5 million+ residents across 4 Western Kenya counties served by a PPP road network with independent performance verification

35.1 kilometres of town roads under continuous monitoring against performance-based contract standards

KES 3.5 billion total PPP infrastructure value, with payments certified only against verified performance

8-year mandate protecting KURA's financial interests across a complex multi-county concession

Client Context

Kenya Urban Roads Authority is the national agency for secondary urban road infrastructure. The CFF roads programme is KURA's most ambitious network expansion to date, part of the government's 10,000 kilometre roads programme designed to overcome the public budget constraint that has historically limited road investment to what annual appropriations can fund.

Under the FDBMT arrangement, contractors bring their own financing to the table. KURA does not pay upfront for infrastructure. It pays for performance over the O&M period. This structure concentrates the contractor's financial incentive on the quality of maintenance, not only the quality of construction. A poorly maintained road reduces the contractor's revenue. An Independent Engineer that rigorously verifies performance protects the government's payments from being made for service levels that are not being delivered.

Lot 18 covers towns across Vihiga, Bungoma, Kakamega, and Busia Counties, four counties with a combined population of over 5 million people and significant agricultural output, cross-border trade through Busia, and urban centres whose economic activity depends on reliable road access.

The Challenge

Seven years is a long time to maintain institutional rigour. Performance standards applied consistently in year one have a tendency to loosen as relationships between client, contractor, and engineer mature. The Independent Engineer's structural challenge is to be as exacting in year six as in year one, with a contractor whose financial interests are served by defining compliance as broadly as possible.

Three specific challenges define the engagement. First, distinguishing genuine performance failures from force majeure events requires technical judgment that is both credible and defensible. Extreme weather, flooding, and unexpected ground conditions can create road damage that is not the contractor's fault, but they can also be claimed as cover for maintenance standards that were inadequate. ACAL's technical team must make that distinction accurately and consistently.

Second, the environmental, social, health, and safety obligations of the O&M phase are ongoing, not construction-phase requirements. Resurfacing, drainage maintenance, vegetation clearing, and structure repair each carry ESHS risks that require active monitoring across 35.1 kilometres in four counties.

Third, KURA needs more than compliance monitoring. It needs strategic intelligence on how the asset is ageing, where maintenance strategy should be adjusted, and what lifecycle decisions will arise over the concession period.

Our Approach

ACAL established the Independent Engineer function from contract commencement in June 2025, building a performance monitoring system, contract administration protocol, and ESHS compliance programme across all 35.1 kilometres in Western Kenya.

The engagement is led by Eng. Dr. George M.B. Kaggiah as Project Director and Mr. Prasanta Dutta as Project Coordinator, supported by a multidisciplinary team including a Highway Engineer, Pavements and Materials Engineer, Structural and Bridge Engineer, Project Surveyor, Dispute Resolution Expert, Environmentalist, Sociologist and Resettlement Specialist, Financial Expert, Materials Technologist, Road Inspectors, and Contracts Engineer.

Continuous road condition monitoring across the Lot 18 network against O&M performance standards, providing the evidence base for payment certification and contractor performance assessment

Contract administration and payment certification tied to verified service levels, not time elapsed, protecting KURA's interests in all contractor interactions

ESHS compliance monitoring across all maintenance activities on the network, with material deviations reported to KURA with recommended responses

Technical and strategic advisory to KURA on road asset management, lifecycle planning, and contractor performance management across the seven-year concession

Solution Deliverd

ACAL established and is running the full Independent Engineer function for KURA's Lot 18 network. Every month, the team is on the network: inspecting, monitoring, certifying payments, tracking ESHS compliance, and advising KURA on asset performance. Performance-based payments are made only when performance has been independently confirmed.

The 35.1-kilometre network serves towns across four counties whose combined population exceeds 5 million. For those residents, the Independent Engineer's role is the mechanism that ensures the roads the contract requires are the roads that actually exist. For KURA, it is the assurance that payments against the KES 3.5 billion PPP contract are made only for performance that has been independently verified.

5M

Western Kenya Residents

5M

Western Kenya Residents

35KM

Town Roads Under IE Oversight

35KM

Town Roads Under IE Oversight

KES 3.5B

PPP Contract Value Overseen

KES 3.5B

PPP Contract Value Overseen

4 Counties

Kakamega, Bungoma, Vihiga, Busia

4 Counties

Kakamega, Bungoma, Vihiga, Busia

Impact

The four counties served by this network recorded a combined population of 5,021,843 in the 2019 Kenya census. Kakamega alone has 1.87 million residents. Bungoma has 1.67 million. The town roads ACAL is overseeing are the urban connectors for communities whose economic activity and daily mobility depend on them being maintained to a consistent standard.

The KES 3.5 billion PPP contract is one of the largest performance-based road infrastructure investments currently active in Kenya's secondary urban network. ACAL's Independent Engineer mandate ensures that every shilling of that investment is paid out only when the performance that justifies it has been independently confirmed.

KURA selected ACAL through competitive procurement against the full field of qualified engineering firms, a process that assessed technical capability, relevant experience, and institutional capacity to sustain a seven-year oversight mandate across a complex multi-county network.

Key Takeaways

Performance-based contracting only works when oversight is genuinely performance-based

A CFF road contract administered on time-and-materials logic, where the contractor is paid for the month rather than for the road condition the month produced, does not deliver performance-based value. ACAL's Independent Engineer function is built around continuous condition monitoring against defined service level standards, with payment certification tied directly to what the monitoring shows. The oversight architecture matches the contract architecture.

The Independent Engineer's credibility is the government's only protection in a long-term PPP

In a seven-year O&M concession, the government's financial interests are protected precisely to the degree that the Independent Engineer can make credible, technically grounded determinations about contractor performance. An engineer whose independence is compromised, or that lacks the technical depth to assess performance disputes rigorously, becomes a liability rather than a safeguard. KURA selected ACAL through competitive procurement to provide the independent professional judgment the concession requires.

Long-term infrastructure contracts treat ESHS as a continuous function, not a construction phase requirement

Maintenance works generate environmental, social, health, and safety risks throughout the contract period. Resurfacing disrupts communities. Drainage clearing affects water courses. Vegetation management involves worker safety. Each activity across 35.1 kilometres in four counties requires ESHS monitoring that is systematic, documented, and consistent. ACAL's compliance function is structured accordingly.

Sector: Transport Engineering, Roads, PPP, Construction Supervision | Client: Kenya Urban Roads Authority (KURA) | Geography: Vihiga, Bungoma, Kakamega and Busia Counties, Kenya | ACAL Role: Independent Engineer, O&M Phase | IE Contract Value: KES 595.6 million | PPP Contract Value: KES 3.5 billion | Tender Reference: KURA/DEV/HQ/407/2024-2025 | Status: Active, 2025-2032

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