Vehicles use a finished section of Thika Road as construction continues. Completion of Kenya’s first ultramodern superhighway is poised to open new business opportunities Photo/JAMES NJUGUNA
Completion of Kenya’s first ultramodern superhighway is poised to open new business opportunities, giving Nairobi’s economy a major boost, economists said.
The 50-kilometre Thika Road, to be commissioned early next year, is also expected to significantly raise the value of real estate. It will also eliminate traffic congestion on one of Nairobi’s major traffic arteries, saving motorists billions of shillings and time that is wasted in daily logjams.
Real estate dealers in Nairobi say the scramble for land along the superhighway began in earnest two years ago with the onset of work on the road and has gone into overdrive.
“Everybody is fighting for a piece of what will surely become the hottest real estate spot in Kenya,” said Mr John Muthua, managing director of Q-Pavillion, a real estate firm based at Kahawa.
“Only five years ago, the price of a half acre plot one kilometre off the highway at Ruiru stood at an average of Sh1 million. That shot up to Sh7 million by June this year and is still rising,” he said.
Mr Muthua said that rising demand means that even at such a high price, there is still a severe supply shortage that is tilting the ground in favour of even higher prices.
“The general value trend has been going up by sometimes up to 100 per cent every year making many land owners reluctant to sell,” he said.
The promise of getting to Nairobi with ease once the road is complete has opened areas that were once out of the question for city residents.
Nairobi’s hinterland has now expanded as far as Kilimambogo, Kenol, Kandara and Gatundu where buyers are snapping up land at record speed.
Mr Muthua said people are looking for residential space away from congested Nairobi estates and the accompanying dilution of the quality of public services.
Civic leader Njihia Ngugi of Thika municipality said completion of the highway could mean a better future for the town that has developed into Kenya’s second largest industrial hub.
“Historically, Thika has provided Nairobi with an industrial and commercial support base,” Mr Njihia said.
“With the new transport system, we expect a new wave of investors to give Thika a second look as a potential candidate for the establishment of big manufacturing plants,” he said.
The first sign of growth linked to the highway began with the arrival of multiple banks in Thika, he said.
Head of the Private Sector Development Division at the Kenya Institute of Public Policy Research and Analysis Joseph Kieya said the highway will make a positive impact on key sectors of the economy, including real estate, manufacturing, transport and the labour market.
“Thika will soon become too expensive to buy or let real estate, opening up new areas for settlement,” he said. “In about another five years, I expect settlements to stretch further down the road towards Murang’a.” Prof Kieya said reduction or elimination of traffic jams should make investing in public transport attractive ultimately increasing competition and pulling down costs.
Elimination of roundabouts and other bottlenecks such as single lane tracks is expected to significantly ease traffic flow and reduce the cost of running a public service vehicle on the highway.
Nairobi is estimated to lose Sh20 billion a year on traffic jams, more than City Hall spends annually to provide services such as water, sewerage and garbage collection to residents.
“Thika Road has been notorious for wasting man-hours. Time that could be useful otherwise being burnt up in traffic jams is a major loss for any economy,” said Prof Kieya.
Completion of the road should also open Thika town and its surrounding to business and leisure visitors.
“It should be possible for Nairobi residents to escape to Thika, Ruiru and nearby towns to patronise hotels and shops, and for business retreats,” said Prof Kieya.
“Investors should see these opportunities and seize them with speed for the first to market advantage.”
This year, Thika municipality will spending nearly a quarter of its annual budget on infrastructural development, especially improvement of roads and water services. “Our water services are already quite reliable and expansive, but we are not stopping until we match our hype of being the Birmingham of Kenya,” said Mr Njihia.
Prof. Kieya however cautioned that explosion of real estate development would harm agriculture and aggravate the country’s food security and foreign exchange challenges.
“It is not a very good thing for the future of agriculture if coffee estates and other fertile farms along Thika Road and beyond are cleared for settlements,” he said.
“We should never forget that a successful country also needs foreign exchange, which horticulture, coffee and tea earns us every year.” hcege@ke.nationmedia.com
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