Road contractors have been paid a fresh Sh20 billion as the government races to clear pending bills, which stalled projects last year amid cash-flow challenges for the service firms.
Official correspondence seen by the Business Daily shows that the money was cleared for payment in March and will cover all certificates of completion (CoC) that were issued between January and March 2026.
A CoC is a formal document that confirms a project has been completed as per the set specifications, scope, and quality standards, and is ready for handover by a contractor.
The latest disbursement raises the total payout to contractors since April 2025 to Sh202 billion, helping to lower cash flow woes that had seen some of the service providers face auctions by banks.
Road contractors got Sh142 billion last year, while a further Sh40 billion was paid between December 2025 and January 2026 under the ambitious State plan to expedite settlement of the debt that had grounded road projects.
“We have paid a total of Sh20 billion for the first quarter of this year (January -March 2026). These are certificates that have already been cleared,’ said Joseph Mbugua, the Principal Secretary for the State Department of Roads.
“Now that we have funds available from the securitisation of the fuel levy, we have agreed that we must avoid accumulation of bills from road contractors because the impact of these bills on contractors and the economy is profound,” he added.
Contractors (both foreign and local) in 2024 laid down tools over the government's failure to pay them billions of shillings for both ongoing and completed works, some dating back to as early as 2016. The debt was estimated at over Sh650 billion as of July 2024. An estimated 585 road projects had stalled due to the debt.
In 2025, the State unlocked the projects under a return-to-work formula, paying Sh123 billion as part of the settlement of debts accumulated between 2005 and December 2024. Many contractors resumed work in April 2025.
Cash flow constraints forced the government to securitise part of the Roads Maintenance Levy (RML)—set at Sh25 per litre of diesel and petrol—to raise commercial loans.
The government securitised Sh7 from the levy in 2024 and a further Sh5 from July last year, bringing the total securitised portion to Sh12 to raise funds for contractor payments.
Under the return-to- work agreement, contractors received 40 percent of their dues in return for forfeiting 70 percent of the interest on the dues. A further 40 percent was paid within three months, easing a cash crunch that had hit the contractors.
Disclosures showed that big-ticket international contractors, mainly Chinese-owned firms, rejected a push by the government for a waiver of interest charges on the Sh650 billion debt for road projects, although their local counterparts agreed to the request and forfeited Sh7.5 billion.
