Cabinet approves 40 per cent top-up for road contractors, gives nod to KPC privatisation
However, the Cabinet said the disbursement will be conditional upon contractors agreeing to extend the final payment deadline by 120 days.
Road contractors with approved claims under the Road Maintenance Levy Fund (RMLF) will receive an additional 40 per cent payout following a Cabinet decision to accelerate payments and unlock stalled projects.
The move, approved during a Cabinet meeting chaired by President William Ruto at State House, Nairobi on Tuesday, is aimed at addressing pending bills and accelerating progress in the roads sector.
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However, the Cabinet said the disbursement will be conditional upon contractors agreeing to extend the final payment deadline by 120 days.
The Cabinet noted that the intervention builds on the successful implementation of the road financing policy through the securitisation of the Road Maintenance Levy Fund, which has already disbursed Sh64.2 billion. This amount has settled 40 per cent of verified claims tied to 575 contracts covering 393 projects.
“To deepen this novel model in infrastructure development, the Cabinet approved an additional payment of up to 40 per cent, bringing the total settlement to 80 per cent,” read the Cabinet dispatch.
The Cabinet emphasised that this conditional top-up will help resolve long-standing financial obligations, improve cash flow for contractors, and ensure continuity in infrastructure projects across the country.
“These measures have resolved long-standing financial obligations, unlocked stalled projects, improved contractor cash flow and ensured continuity in infrastructure development nationwide,” the dispatch read.
In a separate resolution, the Cabinet approved the reinstatement of the Kenya Pipeline Company (KPC) into the government’s privatisation programme. The decision paves the way for a partial divestiture of government shares in the company, which will be offered to the public through the Nairobi Securities Exchange.
According to the Cabinet, this move is aimed at democratising ownership by allowing Kenyans to participate in the energy sector while unlocking the company’s full commercial potential.
“The decision reflects the government’s policy shift toward reducing its role in doing business and instead enabling the private sector and industry experts to drive growth, efficiency, and innovation,” the Cabinet said.
KPC, a key player in Kenya’s energy supply chain, has maintained a strong profitability record and possesses significant asset value. However, the Cabinet noted that the firm has yet to attain its optimal market performance, attributing the underperformance to bureaucratic constraints and inefficiencies within the public sector.
“Bringing in private capital and professional expertise is expected to inject new energy into the company, modernise operations, and position KPC as a regional logistics and energy powerhouse,” read the dispatch.
The Cabinet cited past examples of successful privatisation efforts, including Safaricom, Kenya Commercial Bank, and KenGen, as evidence of how State divestiture can transform institutions, expand regional presence, enhance shareholder value and create employment opportunities.
“The divestiture of KPC is expected to follow this path, boosting investor confidence and supporting the development of Kenya’s capital markets,” the Cabinet said.
Ultimately, the Cabinet said the move signals a shift from State dominance in commercial ventures to a model driven by private sector-led growth, operational discipline, and accountability, ensuring that public resources are better directed toward essential service delivery.
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