Kenya, a country in east Africa has approved 40 projects for possible PPP arrangements. A majority of the projects are transport infrastructure including roads. In 2006 we carried an pioneering research on the feasibility of road tolling in east Africa's urban areas. The findings of the study were presented in a validation workshop inn Nairobi. Here is the presentation

1. Kenya National Chamber of
Commerce and Industry
WORKSHOP ON
Feasibility study on use of Private Finance in
Urban Road Infrastructure Development in
Eastern Africa
Held on November 22, 2006, at The Stanley Hotel Nairobi
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2. The Study
Session 3
By
Musyoka Fred kyendo
Lead Consultant
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3. Scope of the Study
•
The study covered three East African Cities i.e. Nairobi, Dar es
Salaam and Kampala
•
It covered three roads, one in each city
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4. Scope of the Study
•
These are; Jogoo Road in Nairobi; Gayaaza Road in Kampala
and Old Bagamoyo Road in Dar es Salaam
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5. Methodology – Traffic Count
•
A 12 – hour traffic count was conducted in each city
•
In Nairobi, the study counted traffic on Jogoo Road
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6. Methodology – Traffic Count
•
In Kampala, we counted traffic on Gayaaza Road
•
In Dar es Salaam, we conducted on Old Bagamoyo Road
•
These are typical Urban Roads
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7. Methodology – Choice of Road
•
•
•
•
Roads deliberately chosen to test Business model’s universal
applicability.
Jogoo Road is densely populated with vehicles
Gayaaza Road is moderately populated
Old Bagamoyo Road is sparsely populated
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8. Traffic Count - findings
z
Jogoo Road - 50,840 Vehicles
z
Gayaaza Road - 13,558 Vehicles
z
Bagamoyo Road - 8,953 Vehicles
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9. Traffic Count – Modal Split
Qty in 000s
Modal Split on Studied roads
30,000
25,000
20,000
15,000
10,000
5,000
0
Models
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10. Traffic - Survey
•
An open ended questionnaire was administered on 1,000
Motorists in Nairobi and 300 each in Kampala and Dar Es
Salaam
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11. Traffic - Survey
•
1,600 motorists interviewed
•
Some 1440 (90%) motorists respond accurately
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12. Findings
•
PSV’s form the dorminant mode of transport on both
Jogoo and Gayaaza Roads
•
SUVs are the dominant mode on Old Bagamoyo Road
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13. The Findings – Cont’d
•
To make a profit, PSV’s must make six-round trips a day
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14. The Findings – Cont’d
•
All Roads studied are overdue for reconstruction and
expansion
•
Urban tolling methods are completely different from trunk
road methods
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15. The Findings – Cont’d
•
Automated tolling systems are viable in urban roads
•
Average toll-rates in urban roads are way lower than in
trunk roads
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16. The Findings – Cont’d
•
67 per cent of motorist interviewed ready to pay for good
roads
•
They are ready to pay directly to a contractor
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17. The Findings – Cont’d
•
•


Jogoo Road is viable @ US$0.27 per day
Gayaaza and Old Bagamoyo are profitable @ US$0.81 per
day
Traffic density determines the toll rate: The higher the ADT
the lower the toll rate and vice versa
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18. Costs – Time Lost in jams
•
A significant 50% per cent of the sample spent two hours a
day in traffic jams
•
Another 44% complained of spending one hour a day held
in traffic jam
•
A whole 94% of the sample spent between an hour and two
hours in traffic
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19. Costs – Waste Fuel
•
A majority 38.1% waste 3litres of fuel a day in traffic jams
•
34% of respondents waste two litres a day
•
Another 27% waste four litres a day
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20. Cost – Benefit Analysis
•
In effect 99 per cent of respondents “waste” 2 litres of fuel a
day
•
All roads in this study are overdue for
reconstruction/expansion
•
This is the study of the traffic jams some that last for up to
2hours or more
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21. Costs – fuel “wasted”
•
Kenyan motorists lose Kshs 194.14 ($2.7) per day per
capita on “ fuel wastage”
•
Ugandan motorist “burn” UGshs 6860 ($3.71) per head per
day
•
Tanzania motorist “burn” TZShs 3,848 ($3.12) per head per
day
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22. Costs – Man Hours Lost
KRB valued Man-hours lost as follows:
•
•
•
•
•
Senior Manager
Managers
Supervisors
Skilled Workers
Unskilled Workers
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$14.00 per hour
$7.00 per hour
$4.10 per hours
$1.40 per hour
$0.82 per hour
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23. National Productivity Loss
Kenya losses $271 million a year to traffic jams on
Jogoo Road
•
•
Ugandan losses $73 million a year
•
Tanzania losses $49 million a year
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24. To Build or not to Build
•
Smooth wide roads save the country on fuel import bill as
follows:
•
Kenya $29 million; Uganda $13.1 million; Tanzania $7.3
million a year
•
Add to these the productivity loss just demonstrated
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25. Ready to Pay
•
•
•
•
•
•
Some 950 respondent i.e. 67% of the sample were ready to
pay
Of these, PSVs form 45 per cent
private cars/taxis 34%
SUVs & Pick-ups 12%
Others 19%
All ready to pay directly to contractor
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26. Can Investors make Money
•
•
•
•
•
•
Yes,
Assumption;
Only 67% of Motorist will pay
Toll rates will be $0.27 in Kenya and $0.81 in Uganda and
Tanzania
The concession will last 25 years
Historical MV growth rates will be maintained in the next 25
years
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27. MV Growth Rates
•
Kenya Historical growth rate is 4.8% per annum
•
Tanzania 5.5% per annum
•
Uganda 4.5% per annum
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28. Toll Collection
•
Will be collected by Non-stop, fully automated system
•
Transactions enabled by a 5.8 GHz microwave link between
the Road –Side-Unit and the In-Vehicle-Unit on the
windscreens
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29. Toll Collection
•
Provides subsystems for electronic transactions at the
lanes, data collection, supervision, monitoring, violation,
processing, toll clearance operations and reporting facilities
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30. System’s Architecture
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31. Toll Collection
•
Most effective for congested highways and bridges (100,000
vehicles and over)
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32. IRR @12% Discount Rate
Assumption 67% paying
•
•
•
Jogoo Road: IRR
Old Bagamoyo Road:
Gayaaza Road:
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31.2%
27.24%
27.10%
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33. IRR @15% Discount Rate
Assumption 67% paying
•
•
•
•
Jogoo Road: IRR
=
28.7%
Old Bagamoyo Road:
=
23.34%
Gayaaza Road
=
24.5%
The rates are more robust at 80% motorist paying
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34. IRR 12@% Discount Rate
Assumption 80% paying
•
•
•
Jogoo Road IRR
Old Bagamioyo Road
Gayaaza Road
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38%
34%
37.4%
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35. IRR 15@% Discount Rate
Assumption 80% paying
•
•
•
Jogoo Road IRR
Old Bagamioyo Road
Gayaaza Road
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33.30%
35.00%
29.4%
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36. Risks
•
Motorists could choose free roads and avoid toll roads
•
Construction costs could escalate given the rapidly rising
price of crude oil
•
Monopolistic tendencies on the part of the contractor
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37. Vote of Thanks
I thank you all for coming
and your keen interest
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