El Wak-Rhamu Road

Economic Feasibility Study

Report

APRIL 2021
 El Wak-Rhamu Road Economic Feasibility Study Report

Table of Contents

TABLE OF CONTENTS ............................................................................................................................ 2

LIST OF TABLES ...................................................................................................................................... 7
LIST OF FIGURES .................................................................................................................................... 9
ACRONYMS AND ABBREVIATIONS .................................................................................................... 10
EXECUTIVE SUMMARY ........................................................................................................................ 11
1 PROJECT DESCRIPTION ................................................................................................................ 17

1.1 Objectives of the Project .......................................................................................................... 17

1.2 Alignment to Sectoral and Government Objectives .............................................................. 18

Sustainable Development Goals (SDGs) ........................................................................... 18

The African Union Agenda 2063 ...................................................................................... 18

The East African Community (EAC) Vision 2050 ............................................................... 19

Integrated National Transport Policy (INTP) .................................................................... 20

Vision 2030 and the 3rd Medium Term Plan (MTP III) ....................................................... 21

The “Big Four” Agenda ..................................................................................................... 22

Road Sector Investment Programme (RSIP) ..................................................................... 22

Annuity Programme ......................................................................................................... 23

KeNHA Strategic Plan 2018/2019 – 2022/2023 ................................................................ 24

Mandera County Integrated Development Plan .............................................................. 24

1.3 Project Type ............................................................................................................................... 25

1.4 Main Features ............................................................................................................................ 25

2 PRELIMINARY CONSIDERATIONS ............................................................................................... 26

2.1 Background to the Project ....................................................................................................... 26

2.2 Project Context ......................................................................................................................... 26

2.3 Political and Other Risk Factors ............................................................................................... 27

2.4 Project Execution Strategy ....................................................................................................... 27

2/111
 El Wak-Rhamu Road Economic Feasibility Study Report

2.5 Managerial, Administrative and Maintenance Capacity ........................................................ 28

3 ASSESSMENT OF DEMAND .......................................................................................................... 29

3.1 Project Area of Influence .......................................................................................................... 29

3.2 Socio-Economic Profile............................................................................................................. 31

3.3 Economic Outlook ..................................................................................................................... 31

Kenya’s Economic History ................................................................................................ 31

Kenya’s Economic Profile ................................................................................................. 32

Kenya’s Economic Prospects ............................................................................................ 32

Regional Trade ................................................................................................................. 33

Mandera County Economic Profile ................................................................................... 33

3.4 Population ................................................................................................................................. 37

3.5 Traffic Survey Methodology .................................................................................................... 38

Traffic Survey Locations ................................................................................................... 38

Vehicle Classification ........................................................................................................ 39

Classified Link Counts ...................................................................................................... 39

Turning Movement Counts .............................................................................................. 40

Origin-Destination Surveys .............................................................................................. 40

3.6 Traffic Survey Results ............................................................................................................... 40

Average Daily Traffic (ADT) .............................................................................................. 40

Turning Movement Counts .............................................................................................. 42

Non-Motorized Traffic (NMT) Findings ............................................................................ 43

O-D Survey Findings ........................................................................................................ 43

Vehicle Occupancy Rates ................................................................................................. 46

3.7 Base Year and Design Year ....................................................................................................... 46

3.8 Traffic Forecasting .................................................................................................................... 47

Population Growth ........................................................................................................... 47

Gross Domestic Product and Land Transport & Storage ................................................. 47

Gross County Product (GCP) ............................................................................................ 48

3/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Petrol Demand ................................................................................................................. 48

Fuel Sales from Retail Pump Outlets ................................................................................ 49

Number of Newly Registered Motor Vehicles .................................................................. 49

Earnings from Road Traffic ............................................................................................... 52

Historical Traffic Growth ................................................................................................... 52

Summary of Growth Rates ............................................................................................... 53

Adopted Traffic Growth Rates .......................................................................................... 54

3.9 Normal, Diverted and Generated Traffic ................................................................................ 55

Normal Traffic .................................................................................................................. 55

Diverted Traffic ................................................................................................................. 56

Generated Traffic .............................................................................................................. 57

Summary of Normal, Diverted and Generated Traffic ...................................................... 57

3.10 Geometric Design Capacity .................................................................................................. 58

3.11 Pavement Loading Analysis .................................................................................................. 58

4 ENGINEERING DESIGN ASPECTS ................................................................................................. 60

4.1 Geology and Soil Conditions .................................................................................................... 60

4.2 Construction Material Sources ................................................................................................. 61

4.3 Topography and Alignment Characteristics ........................................................................... 61

4.4 Climatic Conditions ................................................................................................................... 62

4.5 Existing and Proposed Design ................................................................................................. 62

Start and End Point .......................................................................................................... 62

Cross-section and Right of Way (ROW) ........................................................................... 62

Geometric Design Standards............................................................................................ 63

Pavement Options ............................................................................................................ 63

Intersections ..................................................................................................................... 64

Drainage and Structures................................................................................................... 65

4.6 Road Sections ............................................................................................................................ 66

4/111
 El Wak-Rhamu Road Economic Feasibility Study Report

4.7 Project Costs .............................................................................................................................. 66

5 ENVIRONMENTAL & SOCIAL SAFEGUARDS (ESS) ..................................................................... 68
6 ASSESSMENT BENEFITS ............................................................................................................... 69

6.1 Appraisal Methodology ............................................................................................................ 69

6.2 Vehicle Operating Characteristics ............................................................................................ 70

6.3 Vehicle Operating Cost Inputs ................................................................................................. 72

Conversion of Financial Costs to Economic Costs ............................................................ 72

Value of Travel Time (VOT) ............................................................................................... 73

6.4 Road Accidents Analysis ........................................................................................................... 78

7 ECONOMIC ANALYSIS .................................................................................................................. 80

7.1 Cost-Benefit Analysis (CBA) ..................................................................................................... 80

7.2 Estimation of Benefits .............................................................................................................. 81

The HDM-4 Analytical Tool .............................................................................................. 81

Economic Analysis Parameters ......................................................................................... 82

7.3 Analysis Scenarios ..................................................................................................................... 87

7.4 Multi-Criteria Analysis (MCA) .................................................................................................. 88

7.5 Road Deterioration Trends ....................................................................................................... 89

7.6 Project Benefits ......................................................................................................................... 90

7.7 Economic Indicators .................................................................................................................. 90

Net Present Value (NPV) Criterion ................................................................................... 90

Economic Internal Rate of Return (EIRR) Criterion ........................................................... 91

Benefit-Cost Ratio (BCR) Criterion .................................................................................... 91

First Year Rate of Return (FYRR) ....................................................................................... 92

Economic Indicator Outputs............................................................................................. 92

7.8 Sensitivity Tests ......................................................................................................................... 92

7.9 Switching Values ....................................................................................................................... 93

8 INTANGIBLE BENEFITS ................................................................................................................. 94

5/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Growth of the Local Economy .......................................................................................... 94

Creation of Employment Opportunities ........................................................................... 94

Improved Security ............................................................................................................ 94

Increase in Value of Land ................................................................................................. 94

Reduced Cost of Living .................................................................................................... 95

Improved Access to Social Services and Amenities .......................................................... 95

9 MONITORING & EVALUATION FRAMEWORK ........................................................................... 96

10 CONCLUSION AND RECOMMENDATIONS ........................................................................... 103

10.1 Conclusion ............................................................................................................................ 103

10.2 Recommendations ............................................................................................................... 103

REFERENCES ....................................................................................................................................... 104
APPENDICES ....................................................................................................................................... 105

Appendix 1 – Economic Indicators ................................................................................................... 105

6/111
 El Wak-Rhamu Road Economic Feasibility Study Report

List of Tables
Table 3-1: Mandera County Socio-Economic Profile ............................................................................ 31
Table 3-2: Trends in Kenya’s GDP Growth (%) .................................................................................... 32
Table 3-3: Regional Trade Volumes Between Kenya and Somalia (KSh ‘000) .................................... 33
Table 3-4: Regional Trade Volumes Between Kenya and Ethiopia (KSh ‘000) .................................... 33
Table 3-5: County Share of GCP (%) .................................................................................................... 33
Table 3-6: GCP at Constant Prices (KSh million).................................................................................. 34
Table 3-7: Per Capita GCP at Constant Prices (KSh) ........................................................................... 34
Table 3-8: 2017 County Share of GAV and GCP by Economic Activity (%) ......................................... 35
Table 3-9: 2017 GCP by Economic Activity in Constant 2009 Prices (KSh million) ............................. 36
Table 3-10: Mandera’s 2019 Population Breakdown by Sub-County ................................................... 37
Table 3-11: Traffic Survey Details ......................................................................................................... 38
Table 3-12: Vehicle Classification ......................................................................................................... 39
Table 3-13: 2019 ADTs ......................................................................................................................... 40
Table 3-14: Junction TMCs ................................................................................................................... 42
Table 3-15: 2019 NMT Findings ............................................................................................................ 43
Table 3-16: OD Matrix ........................................................................................................................... 43
Table 3-17: Trip Purposes ..................................................................................................................... 44
Table 3-18: Vehicle Occupancy Rates .................................................................................................. 46
Table 3-19: Population Trends in Mandera ........................................................................................... 47
Table 3-20: GDP Growth Rates (%), 2013-2018................................................................................... 47
Table 3-21: GCP at Constant 2009 prices ............................................................................................ 48
Table 3-22: Petroleum Demand, 2024-2018 in ‘000 Tonnes ................................................................ 48
Table 3-23: Historical Traffic Growth ..................................................................................................... 52
Table 3-24: Summary of Growth Rates from Various Sources ............................................................. 53
Table 3-25: Traffic Growth Scenarios (Low, Medium & High) ............................................................... 54
Table 3-26: Normal Traffic for the Project Road as at 2019 .................................................................. 55
Table 3-27; Normal Traffic for the Project Road as at 2021 .................................................................. 56
Table 3-28: Assumed Generated Traffic Growth................................................................................... 57
Table 3-29: Normal, Diverted and Generated Traffic ............................................................................ 58
Table 3-30: 10-year Traffic Forecast in PCUs ....................................................................................... 58
Table 3-31: Sample Size and Vehicle Equivalent Factors .................................................................... 59
Table 3-32: Cumulative Standard Axles (CSA) ..................................................................................... 59
Table 4-1: Geological Formations ........................................................................................................ 60
Table 4-2: Alignment Soils CBR ............................................................................................................ 60
Table 4-3: Alignment Characteristics .................................................................................................... 61
Table 4-4: Climate Input Data ............................................................................................................... 62
Table 4-5: Pavement Options ................................................................................................................ 63
Table 4-6: Main Intersections ................................................................................................................ 64
Table 4-7: Existing/Proposed Drainage Structures ............................................................................... 65
Table 4-8: Road Sectioning Data .......................................................................................................... 66
Table 4-9: Estimated Project Costs (KShs) ........................................................................................... 67

7/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Table 4-10: Road Maintenance Costs ................................................................................................... 67

Table 6-1: Basic Vehicle Fleet Characteristics (MT) ............................................................................. 71
Table 6-2: Basic Vehicle Fleet Characteristics (NMT) .......................................................................... 71
Table 6-3: Computation of S.C.F ........................................................................................................... 73
Table 6-4: Percent Distribution of the 2018 Monthly Salaries ............................................................... 74
Table 6-5: Computation of Working Hours ............................................................................................ 75
Table 6-6: Calculation of Working and Non-Working VOT .................................................................... 75
Table 6-7: Vehicle Fleet Cost Characteristics for MT (in KShs) ............................................................ 77
Table 6-8: Vehicle Fleet Cost Characteristics for NMT (in KShs) ......................................................... 77
Table 7-1: Salvage Value (Option 1) ..................................................................................................... 84
Table 7-2: Salvage Value (Option 2) ..................................................................................................... 85
Table 7-3: Salvage Value (Option 3) ..................................................................................................... 86
Table 7-4: Project Alternatives .............................................................................................................. 87
Table 7-5: Project Net Benefits (KShs Millions) .................................................................................... 90
Table 7-6: Economic Indicators at 12% Discount Rate ......................................................................... 92
Table 7-7: Sensitivity Analysis Findings ................................................................................................ 93
Table 7-8: Switch Value Analysis Findings ........................................................................................... 93
Table 9-1: M&E Results Framework ..................................................................................................... 97

8/111
 El Wak-Rhamu Road Economic Feasibility Study Report

List of Figures
Figure 1-1: Regional Trunk Road Network (RTRN) .............................................................................. 19
Figure 1-2: Project Location Map .......................................................................................................... 25
Figure 3-1: Possible Regional Industrial and Manufacturing Clusters (Vision 2030) ............................ 29
Figure 3-2: Project Road Network Linkages.......................................................................................... 30
Figure 3-3: Per Capita GCP Growth Relative to Average Per Capita GCP in Counties (%) ................ 34
Figure 3-4: Proportion of County Economic Activities by Broad Sectors .............................................. 35
Figure3-5: Traffic Survey Location Map ................................................................................................ 39
Figure 3-6: Type of Goods..................................................................................................................... 45
Figure 3-7: Fuel Sales from Retail Pump Outlets .................................................................................. 49
Figure 3-8: New Registration of Personal Vehicles ............................................................................... 50
Figure 3-9: New Registration of Public Transport Vehicles ................................................................... 50
Figure 3-10: New Registration of Trucks & Trailers .............................................................................. 51
Figure 3-11: Motorcycles and 3-Wheelers ............................................................................................ 51
Figure 3-12: Earnings from Road Traffic ............................................................................................... 52
Figure 4-1: Layout of Standard Junction Type B ................................................................................... 64
Figure 4-2: Standard Side Ditch Type B.3 (RDM-1) .............................................................................. 66
Figure 7-1: Road Deterioration Trends .................................................................................................. 89

9/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Acronyms and Abbreviations

AADT Annual Average Daily Traffic

BCR Benefit-Cost Ratio
CBA Cost-Benefit Analysis

CBR California Bearing Ratio

CIDP County Integrated Development Plan

EAC East African Community

EIRR Economic Internal Rate of Return

FYRR First Year Rate of Return

GAV Gross Value Added

GCP Gross County Product

GDP Gross Domestic Product

HDM – 4 Highway Development and Management

INTP Integrated National Transport Policy

KeNHA Kenya National Highways Authority

KRB Kenya Roads Board

KNBS Kenya National Bureau of Statistics

MCA Multi – Criteria Analysis

MTP Medium Term Plan

NMT Non-Motorized Transport

NPV Net Present Value

RICS Road Inventory & Condition Surveys

RSIP Road Sector Investment Programme

SCF Standard Conversion Factor
SDGs Sustainable Development Goals

10/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Executive Summary

Background to the Project

The project road forms part of the 740km Isiolo – Mandera road which is largely unpaved
except for the El Wak – Rhamu road section which was upgraded under a staged-
construction initiative during the year 2018 and is in fairly good ridding condition. The
corridor was formerly scheduled for upgrading through the North-Eastern Transport
Improvement Project (NETIP), the program has since been renamed to Horn of Africa
Gateway Development Project (HoAGDP). The entire corridor is set for development
through financing by multiple multilateral financial institutions.

The Government of Kenya has applied for credit from the International Development
Association (IDA) to upgrade Isiolo – Kulamawe (77 km), Kulamawe – Modogashe (113
km), Wajir – Kutulo (119 km), and Kutulo – Dabasit – Elwak (175 km). The financing of
construction of Elwak – Rhamu (142 km) is also being considered through the Africa
Development Bank (AfDB). The Modogashe – Samatar – Wajir (157 km) section is also
under procurement through the Annuity financing model.

The El Wak – Rhamu project road lies between Km 177 and Km 316 of the Isiolo – Wajir
– Mandera road corridor. The road lies wholly within Mandera County which has one of
the lowest rural access indices in Kenya (<30%) as per the 2018 Kenya Roads Board Road
Inventory & Condition Surveys (RICS). The County has a total road network of 2,996.9 km
out of which only 3% is paved.

The A13 road corridor is expected to provide connectivity to Somali once construction is
completed hence underpinning its regional importance. Locally, it is expected to not only
open up the Mandera County economy to investors but also to connect it to the rest of
the country.

Objectives of the Project

The improvement of the road is expected to amongst others achieve the following objectives:

• Strengthen the pavement to enable it to carry the projected traffic.

• Improve road safety and minimise negative environmental/social impacts.
• Improve the road’s geometric features to meet Class A standards.
• Improve the road’s drainage.

11/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Improvement Interventions
The proposed improvement interventions entails improvement of geometric designs to
meet Class A road standards and, the provision of loop roads around Gari and Rhamu
towns to minimise congestion and enhance traffic flow within these urban centers.

The pavement shall also be strengthened to support Traffic Class 2 using either of the
following pavement structures (Table E-1).

Table E1: Pavement Options

Layer Option 1 Option 2 Option 3
Surfacing 75mm AC Type I Double Surface dressing 50mm AC Type I (Super
(Super pave) (14/20 + 6/10) pave)
Base 150mm Cement 200mm Cement 200mm Cement Stabilised
Stabilised Gravel Stabilised Gravel (UCS 1.5 Gravel (UCS 1.5-3.0MPa)
- 3.0 MPa)
Subbase 175mm Cement 200mm 200mm Cement Stabilised
Improved Gravel Cement Stabilised Gravel Gravel (UCS 0.75-1.5 MPa)
(UCS 0.75-1.5 MPa)
Subgrade Improved to S5 sub- Improved to S5 sub- Improved to S5 sub-grade
grade class grade class class

Other improvements shall entail the improvement of drainage by replacing all the existing
structures with adequately sized ones and providing additional structures. Table E2 below
summarises the existing and proposed drainage structures.

Table E2: Existing/ Proposed Drainage Structures

Existing Structures Proposed Structures
Type (Día/ Size) No. crossing Type (Día/ Size) No. crossing
locations locations
CPC - 2x 0.6m dia 58 CPC – 0.9m dia x 1 69
CPC - 3x0.6m dia 1 CPC – 0.9m dia x 2 172
CPC - 1x0.9m dia +1x0.6m dia 1 BC (2mx1.5m) x 1 cell 16
CPC – 0.9m dia x 1 43 BC (2mx1.5m) x 2 cell 76
CPC – 0.9m dia x 2 23 BC (2mx1.5m) x 3 cell 8
CPC – 0.9m dia x 3 1 BC (2mx1.5m) x 4 cell 22
Armco pipe culvert 1.5m dia 1 BC (2mx1.5m) x 6 cell 2
Vented drift 1.2m dia x 2 pipes 1 BC (3mx2.5m) x 2 cell 2
BC (4.5m x 2.5m) x3 cells 1 BC (4mx2.5m) x 4 cell 1
BC (4mx2.5m) x 8 cell 1
Totals 159 369
Note: CPC-Concrete Pipe Culverts; BC-Box Culvert

12/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Project Costs
The estimated financial costs of the project alternatives are tabulated below (Table E3).

Table E3: Estimated Project Costs (KShs)

Section Option 1 Option 2 Option 3
Elwak-Gari 10,271,424,523.95 9,305,735,616.45 10,208,092,873.95
Gari-Rhamu 9,206,649,010.95 8,272,836,033.45 9,157,381,998.45
Total 19,478,073,534.90 17,578,571,649.90 19,365,474,872.40
Average Cost/km 141,247,813.89 127,473,325.96 140,431,289.87

Study Methodology
The approach used for carrying out the Feasibility Study entailed: Defining the road
network in terms of homogenous sections; Collection and review of all relevant data;
Derivation of vehicle fleet characteristics; Estimation of project costs for the “without” and
“with” project; Calculation of economic indicators using HDM – 4 over a 20-year analysis
period; Determination of whether the economic benefits outweigh the economic costs;
Computation of switch values and sensitivity analysis for the various alternatives,
including undertaking a risk analysis; and, Determining the distribution of benefits. The
intangible benefits were also identified for secondary justification of the project.

13/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Project Benefits
The main benefits include savings in vehicle operating costs (VOCs) and travel time costs
(TTCs) for both motorized and non-motorized transport. The discounted and
undiscounted savings in VOCs and TTCs is as summarized in Table E4 below. Option 1
has the highest savings in VOCs and TTCs.

Table E4: Project Net Benefits (KShs Millions)

Discounted Savings Undiscounted Savings
Options
Savings VOC Savings TTC Savings VOC Savings TTC
Option 1 2,723.92 4,045.11 12,463.09 788.13
Option 2 2,552.92 3,907.52 11,410.82 768.48
Option 3 2,585.71 3,934.80 11,698.12 771.09
Source: HDM-4 Runs

Economic Analysis Outputs

The Table E5 below summarizes the economic indicators of the economic analysis at 12%
discount rate. Pavement Option 1 yields the best returns.

Table E5: Economic Indicators at 12% Discount Rate

Indicator Option 1 Option 2 Option 3
NPV (KES. Millions) 9,951.10 2,638.20 1,546.90
EIRR (%) 19 18 16.9
BCR 1.8 1.7 1.5
FYRR (%) 15.6 15.1 14.8
Source: HDM-4 Runs

Risk Assessment
The tables E6 and E7 below summarises the sensitivity analysis and switch value analysis
results for the various project roads. For the scenarios analysed, the viability of the project
is more threatened by a decrease in benefits than changes in costs. This may be attributed
to the low baseline traffic. Development of the road corridor is expected to generate
enough traffic that will minimize the risk, even with a 20% increase in cost and 20%
decrease in benefits the project still remains feasible.
Table E6: Sensitivity Analysis Findings
Option 1 Option 2 Option 3
Scenario IRR IRR IRR
NPV BCR NPV BCR NPV BCR
(%) (%) (%)
Increase in Costs (20%) 7,233.2 16.6 1.5 6,515.9 15.8 1.5 5,200.5 14.8 1.3
Decrease in Benefits (20%) 5,243.0 16 1.4 4,651.3 15.3 1.3 3,553.9 14.3 1.2
Increase in Costs +
Decrease in Benefits both 2,525.1 13.7 1.2 1,844.4 13.2 1.1 521.9 12.3 1.0
(20%)
Source: HDM-4 Runs
14/111
 El Wak-Rhamu Road Economic Feasibility Study Report

As shown in Table E7 below, Option 1 is the most robust despite costing relatively higher
than the other options as it would take a 38% increase in cost or 71% decrease in benefits
for its viability to be threatened.

Table E7: Switch Value Analysis Findings

Parameter Option 1 Option 2 Option 3
Increase in Capital & Recurrent Costs (%) 38% 36% 35%
Decrease in Benefits (%) -71% -69% -67%
Source: HDM-4 Runs

Environmental & Social Safeguards (ESS)

ESS have been carried out in compliance with the requirements of both the National
Environment & Management Authority (NEMA) and the African Development Bank
standards.

Amongst the identified environmental impacts included Noise pollution; Air pollution;
Water pollution; Increased consumption of fossil fuel; Generation of solid waste; and, Soil
quality degradation due to oil spills amongst others. The social impacts are expected in
town centers where some realignments have been proposed leading to loss of property
and land. A detailed record of Project Affected Persons (PAPs) and Land/ Asset Valuation
Reports have been prepared in line with the regulatory requirements.

These negative impacts are remediable with the implementation of the proposed
Environmental and Social Management Plans (ESMPs), Vulnerable & Marginalized Group
Plans (VMGPs), Occupational Health & Safety Management Plans (OHSMPs) and
Resettlement Action Plans (RAPs) and the Resettlement Action Plans (RAPs).

Conclusion and Recommendations

A summary of the findings is as provided in Table E8 below.

Table E8: Summary Findings

No. Theme Remarks
1. Project Relevance Context Project is in line with KeNHA Strategic Plan, SDGs, Agenda
2063, EAC Vision 2050, Kenya Vision 2030 and MTP III
2. Managerial, KeNHA has adequate capacity and proper institutional set-
Administrative and up having successfully handled similar projects.
Maintenance Capacity Maintenance funds for the road shall be availed from the
fuel levy fund.
3. Technical Assessment Designs were prepared in line with relevant
standards/manuals.
4. Environment & Social Mitigation/Enhancement measures developed in
Safeguards Environmental and Social Management Plans (ESMPs),
15/111
 El Wak-Rhamu Road Economic Feasibility Study Report

No. Theme Remarks

Vulnerable & Marginalized Group Plans (VMGPs),
Occupational Health & Safety Management Plans
(OHSMPs) and Resettlement Action Plans (RAPs) and the
Resettlement Action Plans (RAPs).
5. Economic Assessment Positive NPV; EIRR>12%; BCR>1.0.

6. Risk Assessment Acceptable Switch Values & Sensitivity Analysis

The project is expected to have enormous economic and social benefits if implemented.
All the identified negative social and environmental impacts are manageable, and suitable
mitigation measures have been proposed. It is justifiable to conclude that the proposed
road project is viable and should be implemented as proposed using pavement Option
1.The decision to adopt pavement Option 1 as opposed to the other two options has
been informed by the following reasons:

1. Provides the highest net present value with an Internal rate of return of 19%
2. The design and pavement structure is in line with those adopted by the other
sections of the Horn of Africa Gateway Development Project (HoAGDP).
3. The optimal pavement which is super-pave asphalt concrete surfacing performs
better in the prevailing hot weather within the project area as opposed to surface
dressing which is more prone to softening and rutting.
4. Asphalt concrete surfacing is better suited for the adopted traffic design class of
T2 along such an international trunk road as opposed to surface dressing.

16/111
 El Wak-Rhamu Road Economic Feasibility Study Report

1 Project Description

1.1 Objectives of the Project

The objective of this Economic Feasibility Study Report is to provide decision makers at the
Government of Kenya and the Kenya National Highways Authority (KeNHA) with sufficient
economic costs and benefits information to facilitate decision on the proposed improvements
along the El Wak – Rhamu road section.

These improvements are expected to amongst others achieve the following objectives:

• Strengthen the pavement to enable it to carry the updated future traffic

projections.
• Improve road safety and minimise negative environmental/social impacts.
• Improve the road’s geometric features to meet Class A standards.
• Improve the road’s drainage.

17/111
 El Wak-Rhamu Road Economic Feasibility Study Report

1.2 Alignment to Sectoral and Government Objectives

Sustainable Development Goals (SDGs)

The SDGs consists of 17 universal goals and 169 targets that are to be achieved within a 15-year
period (i.e., 2015-2030) by UN member states. They are structured to build on the successes
that were achieved during the implementation of the Millennium Development Goals (MDGs),
whose target year had been set at 2015. The universal goals, targets and indicators are meant
to guide policy formulation in the member states by emphasizing on sustainable development.

Specifically, improvement of the project road is expected to directly promote the attainment of
SDG no. 9 “Building resilient infrastructure, promoting inclusive and sustainable
industrialization and fostering innovation”.

The road will also promote the achievement of the other SDGs including the following targets:

• (SDG no. 3) Ensuring healthy lives and promoting well-being for all at all ages: - the road
shall be subjected to road safety audits and awareness campaigns.
• (SDG no. 10) Reducing inequality within and among countries: - the improved
road shall reduce inequality in the marginalized northern areas of Kenya
• (SDG no. 8) Promote sustained, inclusive and sustainable economic growth, full
and productive employment and decent work for all: - road will open up the
region for trade and commerce. A significant number of jobs shall be created
during construction.
• (SDG no. 16) Promoting peaceful and inclusive societies for sustainable
development, providing access to justice for all and building effective,
accountable and inclusive institutions at all levels: - The road shall enhance
response time for law enforcement agencies.

The African Union Agenda 2063

Agenda 2063 is Africa’s long-term development blueprint and masterplan aimed at socio-
economic transformation of the continent between the period 2013 and 2063. Its overarching
vision is, “an integrated, prosperous and peaceful Africa, driven by its own citizens and
representing a dynamic force in international arena”.

It’s made up of 7 aspiration, 20 goals and 37 priority areas. Improvement of the project road is
expected to contribute towards the achievement of these aspirations nationally, and at the local
levels. In particular, it shall ensure: 1) Improved living standards by ensuring better access to
services; 2) Improved security and stability in the marginalized region; 3) Enhance economic
18/111
 El Wak-Rhamu Road Economic Feasibility Study Report

transformation and integration between Kenya and Somalia; 4) Improve agricultural production
along Daua River in Rhamu; and, 5) The development of world class infrastructure.

The East African Community (EAC) Vision 2050

The EAC is a regional inter-governmental organization made up six states including Burundi,
Kenya, Rwanda, South Sudan, Tanzania and Uganda. The EAC is mandated to spearhead
cooperation amongst the partner states in various spheres including: 1) Customs Union; 2)
Common Market; 3) Monetary Union; and, 4) Political Federation.

To guide the integration process, the EAC developed the EAC Vision 2050 which aims to
transform the EAC into an upper–middle income region based on the principles of inclusiveness
and accountability, improved access to affordable and efficient regional transport, energy and
communication network for increased competitiveness. One of the pillars of the EAC 2050 is
infrastructure development, whose target is improved accessibility for increased
competitiveness. The priority road transport corridors are shown in the Figure 1-1 below.

Figure 1-1: Regional Trunk Road Network (RTRN)

19/111
 El Wak-Rhamu Road Economic Feasibility Study Report

The proposed road section is an international road that provides connectivity to the neighboring
country of Somalia.

Integrated National Transport Policy (INTP)

Kenya’s national transport policy is described in a report titled: “A Report on Integrated
National Transport Policy: Moving a Working Nation” developed by the Ministry of
Transport in May 2009.

The report highlights the challenges bedevilling the transport sector and proposes a set
of policy principles aimed at addressing them.

Some of the main challenges identified in INTP include: (i) Poor quality of transport
services; (ii) Inappropriate modal split; (iii) Unexploited regional role of the transport
system; (iv) Transport system not fully integrated; (v) Urban environmental pollution; (vi)
Lack of an urban/rural transport policy; (vii) Institutional deficiencies; (viii) Inadequate
human resource capacity; and, (ix) Lack of a vision for the transport sector.

Some of the main principle actions required to address the challenges as highlighted in
the INTP include: (i) Clarification of the roles in the delivery and management of transport
infrastructure and services e.g. central government, statutory bodies, the private sector,
NGO’s etc.; (ii) Adoption of “user pays” and “polluter pays” principles to promote
economic efficiency by enabling generation of sufficient revenues to support
development, operation and maintenance of transport infrastructure and services; (iii)
Encouraging Stakeholder consultation in setting of tariffs and other prices; (iv) Financing
of economic infrastructure through user charging or cost recovery from direct users and,
also financing social and strategic infrastructure through subsidisation on a declining
basis over time; and, (v) Strengthening regulatory framework.

These policy principles have been implemented to various levels by the government over
the years with the main challenge being the implementation of “user pays” and “polluter
pays” principles to generate sufficient revenues to support development and
maintenance of transport infrastructure. The role of the private sector in financing
projects is also yet to be fully embraced.

A major policy shift is not expected to occur in the construction of the project road. The
project road section is expected to be implemented by KeNHA either using funds from
the Development Vote by the Government of Kenya and loans/grants from the
multilateral financing institutions.

20/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Vision 2030 and the 3rd Medium Term Plan (MTP III)
Kenya’s Vision 2030 is the country’s long-term development blueprint for the period
between 2008 and 2030 aimed at transforming the country a newly industrialising,
“middle-income country providing a high-quality life to all its citizens by the year 2030”.
The vision is premised on three pillars, the economic, the social and the political pillar all
geared towards ensuring macroeconomic stability; continuity in governance reforms;
enhanced equity and wealth creation opportunities for the poor; infrastructure; energy;
science, technology and innovation (STI); land reform; human resources development;
security as well as public sector reforms.

Cognisant to point out is the emphasis Vision 2030 lays on infrastructure, with the country
aspiring to be interconnected through a network of roads, railway, ports, airports, water
and sanitation facilities, and telecommunications by the end of implementation period.

The Kenya Vision 2030 is to be implemented in successive five-year Medium-Term Plans.

The first plan (MTP I) covered the period 2008 – 2012, and the second (MTP II) covers
2013 - 2017. The MTP’s are designed to fast-track flagship projects identified under Vision
2030, various programmes and key policies.

The current medium-term macroeconomic framework for the period 2018-2022 is

consistent with Kenya Vision 2030 and aims at putting the economy on a high growth
path, to ensure that double digit growth is realized, by the end of the plan period.

Amongst the major infrastructural projects planned by the framework during the current
third medium term plan (MTP III) include: -

1. Improvement of 190 km of roads under the East Africa Road Network Project (EARNP).
2. Improvement of 83 km of roads under the Kenya Transport Sector Support Project.
3. Improvement of 350 km of roads under the East Africa Regional Transport, Trade and
Development Facilitation Project.
4. Improvement of 47 km of roads under the National Urban Transport Improvement
Project (NUTRIP).
5. Improvement of 344 km of roads under the Northern Kenya Transport
Improvement Project (NETIP).
6. Construction of the 450 km Mombasa-Nairobi six lane highway toll road.
7. Construction/rehabilitation of 7,500 km under the roads 10,000 programme and 176
Kms to low volume seal roads and 298.6 Kms to gravel surface dressing under Roads
2000 programme.
8. Periodic and routine maintenance of 161,456 km of roads.
9. Decongestion of Cities and Urban Areas through the construction of 308 km
bypasses, 53.3 km of missing links, and 40 km of Non-Motorized Transport Facilities.

21/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Transit Systems in Mombasa Gate City and improvement of Mombasa commuter rail.
10. Implementation of a Road Safety Programme including development and
implementation of the National Road Safety Action Plan 2018-2022.
11. Development of the 50-Year Transport Master Plan.
12. Development of 20-Year Roads Master Plan.

It can thus clearly be seen that the improvement of the project road is certainly a priority
project which is in line with the MTP III (2018-2022) involving the improvement of 344km
of roads under NETIP.

The “Big Four” Agenda

The plan was launched on 12th December 2017 to fast track the country’s development
agenda for the 5-year period between 2018 and 2022 in line with the Vision 2030. The
plan focuses on four key areas viz.: (i) Job creation through bolstering manufacturing from
9.2% to 20% of the GDP; (ii) Provision of affordable and universal healthcare; (iii) Provision
of 500,000 affordable and decent housing; and, (iv) Enhancing food and nutritional
security.

Improvement of the project road is expected to contribute towards the achievement of

the Agenda through boasting livestock production hence promoting food security,
improving access to medical facilities and opening up the area for the development of a
meat processing facility (with tannery) as envisioned in Vision 2030.

Road Sector Investment Programme (RSIP)

The Kenya Roads Act 2007 stipulates that a Road Sector Investment Programme (RSIP)
be prepared every 5 years to guide the development and maintenance of the road sub-
sector.

The 1st phase of the RSIP1 (2011-2015), was prepared in the year 2011 by the Kenya Roads
Board (KRB) and had three main priorities: (1) Routine and periodic maintenance; (2)
Rehabilitation and reconstruction of failed road sections; and, (3) Upgrading, capacity
improvements and new construction.

The preparation of the 2nd phase is now complete and shall outline the country’s
development and maintenance priorities for the road sub-sector for the years between
2018 and 2022. The project road shall then have to be aligned with the programme from
RSIP.

22/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Annuity Programme
The programme was launched by the government in June 2014 with the aim of attracting
private sector financing to the infrastructure sector with the aim of improving some
10,000km of roads.

Under the programme, the contractors are to design, finance and construct roads within
a stipulated time not exceeding three (3) years and guarantee construction quality. The
contractors are also tasked with raising at least 70% of the total construction cost of the
project before signing the contract. Upon completion of construction, the contractors are
to maintain the roads for a maximum period of 8 years during which they are to be paid
in terms of fixed annual payments (i.e., annuity). The government is meanwhile tasked
with negotiating loans and payment terms with the banks on behalf of the contractors
and also providing guarantees to the banks.

The annuity programme was initially suspended by the government owing to concerns
about the inflated construction costs that were submitted by the bidders but has since
been revived. Some of the projects proposed for improvement under this programme by
KeNHA include: -

• 25 km Kwale – Kinango (B92) road;

• 41 km Mariakani – Kinango (B91);
• 50 km Modogashe – Habaswen – Wajir (Modogashe – Samatar Section) (A13)
road;
• 75 km El Wak – Rhamu – Mandera (Rhamu – Mandera section (A13) road;
• 19 km Kilgoris – Lolgorian (B3) road;
• 29 km Kehancha – Lolgorian (B1) road;
• 22 km Bomas – Kiserian – Magadi (Dualling Bomas – Kiserian Section) (B19) road;
• 9 km Bomas – Karen – Dagoreti – Ruiru (Bomas – Dagoreti Market section) (B19);
• 70 km Nanyuki – Gwa Kungu (B22) road;
• 133 km Laisamis – Ngurunit – Nursaery (South Horr) (B74) road;
• 67 km Illasit –Njukini – Taveta (B55) road;
• 33 km Ngong – Kiserian – Isinya (B50) road; and
• 43 km Kajiado – Imaroro (B52) road.

The project road has recently been upgraded to bituminous standards by KeNHA under
a stage improvement programme. This involved staged-construction where the road was
constructed up to the subbase layer and then sealed using a double-surface dressing
layer.

23/111
 El Wak-Rhamu Road Economic Feasibility Study Report

KeNHA Strategic Plan 2018/2019 – 2022/2023

Some of the planned targets for the current 3rd Strategic Plan (SP) include the following:

i. Construction and rehabilitation of 3,820km of roads;

ii. Acquisition of titles for 9,000km of road reserve and 40 road camps;
iii. Preservation/maintenance of 50,000km under routine maintenance (10,000
km annually), 5,000km under periodic maintenance (1,000km annually) and
30,000km under PBC (6,000 km annually);
iv. Planting of 60,000 trees for environmental preservation to act as carbon sink;
v. Rehabilitation of 100% of all quarries and borrow pits after construction works;
vi. GIS mapping of 18,101km of KeNHA’s network; and,
vii. Implementation of at least 4 road projects under the PPP financing framework.

According to the SP, the project road forms part of the Isiolo – Modogashe – Wajir – El
Wak – Rhamu – Mandera (A13) road corridor and is amongst those slated for
improvement to boast regional integration and trade facilitation.

Mandera County Integrated Development Plan

The planned priority interventions by the Marsabit County government during the 2018
– 2022 period in Roads, Public Works & Transport section are aimed at enhancing
regional connectivity for sustainable socio-economic development.

Amongst the main targets outlined in the CIDP for the road sector include amongst
others:
i. Upgrading of 38km of roads to bitumen standards;
ii. Paving of Kutulo-Elwak, Elwak-Rhamu, Rhamu-Mandera, Mandera-
Lafey, Danaba-Takaba-Wargadud and Danaba-Dandu-Kukub-Banisa in
partnership with relevant agencies;
iii. Gravelling of 975km of roads;
iv. Rehabilitation of 1,000km of gravel roads; and,
v. Construction of 20 No. bridges/box culverts and 50 No. drifts.

Upgrading of the project road was identified as a priority by the County government.

24/111
 El Wak-Rhamu Road Economic Feasibility Study Report

1.3 Project Type

The project encompasses a road improvement project aimed at boasting regional

integration and trade facilitation while also boasting local economic and social
development.

1.4 Main Features

The project road is located in Mandera County which is situated towards the north eastern
part of Kenya. It starts at El Wak and passes through Wargadud, Bambo and Gari before
terminating at Rhamu.

It measures approximately 142 km and was recently upgraded to bituminous standards

through a staged construction strategy. The pavement has, therefore, been constructed
to a lower traffic class which requires strengthening in light of the proposed upgrade of
the entire corridor to bituminous standards from Isiolo to Mandera.

The location map of the project road is shown in the Figure 1-2 below.

Figure 1-2: Project Location Map

25/111
 El Wak-Rhamu Road Economic Feasibility Study Report

2 Preliminary Considerations

2.1 Background to the Project

The project road forms part of the 740km Isiolo – Mandera road for which detailed
engineering design was carried out between 2007 and 2010 under three (3) lots.

• Isiolo – Garbatula junction – Modogashe (190km)

• Modogashe – Wajir (156km)
• Wajir - Mandera (388km)

Most of these road sections are still unpaved barring the El Wak – Rhamu road section
which was recently upgraded under a staged-construction initiative.

The Government of Kenya is, however, committed to improving the road network in the
north eastern region and has applied for credit from the International Development
Association (IDA) under the North-Eastern Transport Improvement Project (NETIP) to
upgrade some of these road sections. Part of this financing package is to be used to study
the strengthening of El Wak – Rhamu section so as to be able to support the updated
traffic projections.

NETIP has since been renamed Horn of Africa Gateway Development Project (HoAGDP)
with financing for the entire corridor being undertaken by multiple multilateral financial
institutions. IDA, for instance, is financing the construction of the Isiolo – Elwak section of
the corridor with the Africa Development Bank (AfDB) being approached to finance the
Elwak – Rhamu section.

2.2 Project Context

The project road lies wholly within Mandera County which has one of the lowest rural
access indices in Kenya (<30%) according the 2018 Kenya Roads Board’s Road Inventory
& Condition Surveys (RICS). The RICS also revealed that the County has a total road
network of about 2,996.9km out of which only about 3% is paved. The national road
network is about 1,191.22km while the county road network is about 1,805.64km.

The A13 road corridor is expected to provide connectivity to Somali once construction is
completed hence underpinning its regional importance. Locally, it is expected to not only
open up the Mandera economy to investors but also to connect it to the rest of the
country.

26/111
 El Wak-Rhamu Road Economic Feasibility Study Report

2.3 Political and Other Risk Factors

There are several potential risks that may negatively impact on the successful
implementation of this project including:

1. Insecurity in the project area from both inter-clan clashes and insurgent attacks
from the neighbouring countries. Involvement of community leaders shall be
paramount from the onset along with the need to establish several security
outposts. Adequate provisions for these mitigation measures have been made in
the project design and costed in the Bill of Quantities.

2. Impact of the COVID-19 global pandemic. The impact of COVID-19 on global

supply chain has been laid bare for all to see. It is hoped that at the time of
procurement of the civil works appropriate strategies would have been initiated
on how to deal with the challenges posed by COVID-19. It’s impact of commodity
prices should be assessed even more critically.

2.4 Project Execution Strategy

The El Wak – Rhamu (A13) road section has recently been upgraded to bituminous
standards using the staged-construction initiative. Under the initiative, the pavement was
constructed to support lower traffic classes with plans to strengthen it in the near-future
when traffic grows. A design review has been undertaken to amongst others propose a
suitable stronger pavement to be constructed in the near-future.

Being a national road, the project is expected to be executed by KeNHA – a state

corporation under the Ministry of Transport, Infrastructure, Housing & Urban
Development mandated to develop, rehabilitate, manage and maintain all national trunk
roads.

Procurement of civil works and acquisition of consulting services for execution of the
project is to be in line with applicable procurement legal framework with the project
expected to be implemented using a plant-based approach given its magnitude.

Additionally, the project is to be tendered in two (2) lots viz.:

1. Lot 1: El Wak (Km 177+700) – Gari (Km 250+700) and Gari Market Loop
2. Lot 2: Gari (Km 250+700) – Rhamu (Km 315+600) and Rhamu Town Loop

27/111
 El Wak-Rhamu Road Economic Feasibility Study Report

2.5 Managerial, Administrative and Maintenance Capacity

As previously stated, KeNHA will be responsible for the execution of the project and have
the capacity having successfully delivered similar projects across the country, most
notably Isiolo – Marsabit – Moyale road which traverses a similar region.

The long-term sustainability of the project benefits will, however, depend on the ability
to implement timely maintenance and enforce axle load control. It is expected that
KeNHA shall prioritize timely maintenance interventions through the road maintenance
levy funds to allow full realization of the estimated benefits.

28/111
 El Wak-Rhamu Road Economic Feasibility Study Report

3 Assessment of Demand

3.1 Project Area of Influence

Presently, the project road section predominantly serves local traffic owing to poor
connectivity both upstream and downstream. Improvement of the entire corridor from
Isiolo to Mandera is, however, likely to change this narrative by opening up a completely
new corridor to the north eastern parts of Kenya and providing a critical link to Somalia.

This new corridor is projected to support regional integration and boast trade across the
country by facilitating faster movement of agricultural products and livestock from the
north-eastern region to the rest of the country.

Additionally, the new road corridor shall facilitate the proposed establishment of a
disease-free zone and a meat processing facility (with tannery) as envision in Vision 2030
(see Figure 3-1 below).

Figure 3-1: Possible Regional Industrial and Manufacturing Clusters (Vision 2030)

Source: Republic of Kenya (2007). Kenya Vision 2030

29/111
 El Wak-Rhamu Road Economic Feasibility Study Report

The road section is also envisioned to provide connectivity to major transport corridors
most notably the LAPSSET corridor where it provides the only linkage to the North
Eastern tip of Kenya (Figure 3-2). It shall ensure easy delivery of goods from Lamu port
to south eastern Ethiopia and the northern tip of Somalia.

Figure 3-2: Project Road Network Linkages

Source: Mipakani Project (2020)

30/111
 El Wak-Rhamu Road Economic Feasibility Study Report

3.2 Socio-Economic Profile

According to the County Fact Sheet, the County may be classified as marginalised since
it lags behind in terms of various national average indicators as shown In Table 3-1 below.

Table 3-1: Mandera County Socio-Economic Profile

Indicator Mandera National Average
Land Area (Sq. Km) – year 2019 25,939.8 580,876.3*
Population Density (Persons per Sq. Km) - year 2019 33 82
No. of Households - year 2019 125,763 12,143,913*
Registered Births by the County - year 2019 12,342 1,191,507*
HIV/AIDS Prevalence rate - year 2019 0.3 4.7
Age dependency ratio - year 2019 137.2 81.6
% of Households with Electricity connection
13.3 41.4
from the Mains – 2015/16 KIHBS
% of population drawing water from Tubewell/ borehole
23.8 7.4
with pump – 2015/16 KIHBS
Primary school gross attendance ratio – 2015/16 KIHBS 78.8 107.2
Secondary school gross attendance ratio – 2015/16 KIHBS 56.7 66.2
% of population above 15 years that is literate (able to
47 84.5
read and write) – 2015/16 KIHBS
% of Households receiving cash Transfers 54.1 33.5
*Represents absolute numbers.
Source: KNBS Survey reports, 2015/2016 Kenya Integrated Household Budget Survey reports

Improvement of the project road will enable redress of the above issues by improving
the living standards.

3.3 Economic Outlook

Kenya’s Economic History

Kenya’s economic growth has been inconsistent since its independence in 1963. During
the initial years of independence, the country achieved high economic growth of 6%,
which declined to below 4% in the following decades. In the 1990s, Kenya's GDP also
experienced great inconsistency, ranging between negative figures and 4%. After the
millennium, Kenya started experiencing higher growth rates which peaked in 2007 at 7%.
However, the post-election violence in early 2008, coupled with the effects of the global
financial crisis on remittance and exports, reduced the GDP growth to 1.7% in 2008. The
economy has improved since 2010 with growth rates averaging higher than 5% per
annum.

31/111
 El Wak-Rhamu Road Economic Feasibility Study Report

The Table 3-2 below shows the trends in economic growth over the last 5 years: -

Table 3-2: Trends in Kenya’s GDP Growth (%)

Year 2015 2016 2017 2018 2019*
GDP Growth at Constant 2009 Prices (%) 5.7 5.9 4.9 6.3 5.4
Source of Data: Economic Survey 2020 – Table 0, KNBS. * Provisional

Kenya’s economy has since been rebased in accordance with the 2008 United Nations’
System of National Accounts (i.e., the 2008 SNA). The rebasing saw a 20.5% increase in
the 2009 GDP above the previous estimates owing to the incorporation of more sectors
into the national economy that were previously not captured. This has seen the GDP per
capita of Kenya increasing up to $ 1,358 hence making Kenya to shift from low-income
status to lower middle-income status in the year 2014.

Going forward, it is believed that sustained efforts to increase exports and invest in
transport and energy infrastructure will help accelerate economic growth and strengthen
Kenya's position externally barring the impacts of the COVID-19 pandemic.

Kenya’s Economic Profile

The Kenyan economy is still dominated by agriculture. In 1980, agriculture accounted for
33% of Kenya’s overall GDP. In 1990, agricultural production added 30 per cent to GDP
and in the year 2000, it increased to 32 per cent. In 2010, agricultural production input
into the GDP fell to 21.2% per cent and increased to 34.1% in 2019.

The manufacturing, construction and the transport and storage industries are vital
providers of job opportunities in a growing developmental economy but remained
relatively low at 22.6% of the total GDP in 2010 before decreasing to about 21.6 % of
total GDP 2019.

Kenya’s Economic Prospects

Kenya’s economic outlook according to Government of Kenya, Africa Development Bank
Group, International Monetary Fund and World Bank forecasts a GDP growth of between
5% and 7%.

The current medium-term macroeconomic framework, MTP III, for the period 2018-2022
is consistent with Kenya Vision 2030 and aims at putting the economy on a high growth
path, to ensure that double digit growth is realized, by the end of the plan period. The
plan also been aligned by the “Big Four Agenda” which was launched in 2017 by president
Uhuru Kenyatta to focus on manufacturing, affordable housing, universal health coverage
and food security.

32/111
 El Wak-Rhamu Road Economic Feasibility Study Report

The effectiveness of the framework is supported by the policy, legal, institutional and
structural reforms that will be implemented by the government to enhance
macroeconomic stability, improve business environment and ensure transparent and
accountable use of public resources. Employment creation is a key component of the
overall strategy to contribute to the socio-economic objectives of tackling poverty and
income inequality. It is, however, hoped that the impact of COVID-19 pandemic will not
have long-term effects on economic prospects.

Regional Trade
Given that the project road forms part of a link offering inter-regional connectivity
between Kenya and Somalia, the total trade volumes between these two countries have
been reviewed and is as summarised in Table 3-3 below.

Table 3-3: Regional Trade Volumes Between Kenya and Somalia (KSh ‘000)

Item 2015 2016 2017 2018 2019*

Exports 15,486,067.1 18,041,853.6 19,745,139.3 15,145,272.3 11,841,821.1
Imports 31,272.8 57,562.7 102,618.7 954,489.9 485,778.4
Total 15,517,339.9 18,099,416.3 19,847,758.0 16,099,762.2 12,327,599.5
Growth (%) 16% 17% 10% -19% -23%
Source of Data: Economic Survey 2020 * Provisional

In generally, trade between Kenya and Somalia was on an upward trajectory up to the
year 2017 with the balance of trade skewed in favour of Kenya. Trade between Kenya and
Ethiopia has been erratic for the last five years as shown in table 3-4 below.

Table 3-4: Regional Trade Volumes Between Kenya and Ethiopia (KSh ‘000)

Item 2015 2016 2017 2018 2019*

Exports 8,158.70 9,141.60 8,230.40 6,677.70 7,104.40
Imports 853,489.20 905,520.20 3,209,521.90 1,785,385.60 2,082,511.90
Total 861,647.90 914,661.80 3,217,752.30 1,792,063.30 2,089,616.30
Growth (%) -88 6% 252% -44% 17%
Source of Data: Economic Survey 2020 * Provisional

Improvement of the condition of the project road is expected to further boost regional
trade between Kenya with Somalia and Ethiopia.

Mandera County Economic Profile

According to a 2019 KNBS publication dubbed the Gross County Product (GCP) Report,
the average contribution of Mandera County to the national GCP between the period
2013 - 2017 stood at paltry 0.5% as shown in the Table 3-5 below.

Table 3-5: County Share of GCP (%)

33/111
 El Wak-Rhamu Road Economic Feasibility Study Report

2013 2014 2015 2016 2017 Average

Proportion (%) 0.5 0.5 0.5 0.5 0.5 0.5
Source: Gross County Product Report 2019, KNBS.

The trends in GCP for Mandera County over the last 5-years is as shown in Table 3-6
below.

Table 3-6: GCP at Constant Prices (KSh million)

2013 2014 2015 2016 2017
GCP 17,418 18,230 19,044 19,889 20,725
Source: Gross County Product Report 2019, KNBS.

The improvement in GCP over the intervening period has also translated to a marginal
improvement in living standards as revealed by the GCP per capita in the Table 3-7 below.

Table 3-7: Per Capita GCP at Constant Prices (KSh)

2013 2014 2015 2016 2017
GCP per capita 25,867 26,594 27,287 27,968 28,602
Source: Gross County Product Report 2019, KNBS.

On average, Mandera County has been growing at below the overall average growth of
2.8% during the intervening period (See Figure 3-3 below). This highlights the need of
investment in the county in a bid to shore up its economic prospects.

Figure 3-3: Per Capita GCP Growth Relative to Average Per Capita GCP in Counties (%)

Source: Gross County Product Report 2019, KNBS.

It is, therefore, expected that improvement of the roads shall further improve the fortunes
of Mandera County given its huge potential in agriculture and services as depicted in
Figure 3-4 below.

34/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Figure 3-4: Proportion of County Economic Activities by Broad Sectors

Source: Gross County Product Report 2019, KNBS.

Mandera County’s greatest contribution to the GCP as at the year 2017 was mainly from
the other service activities (1.6%) and Public administration & defence (1.4%). The tables
3-8 and 3-9 below summarise the county share of Gross Value Added (GVA) and GCP by
economic activity as at 2017.

Table 3-8: 2017 County Share of GAV and GCP by Economic Activity (%)
Sector % Share
Agriculture, forestry & fishing 0.5
Mining & quarrying 0.3
Manufacturing 0.0
Electricity supply 0.4
Water supply; waste collection 0.5
Construction 0.6
Wholesale & retail trade; repair of motor vehicles 0.3
Transport & storage 0.2
Accommodation & food service activities 0.2
Information & communication 0.3
Financial & insurance activities 0.2
Real estate activities 0.5
Professional, technical & support services 0.0
Public administration & defence 1.4
Education 0.8
Human health & social work activities 0.5
Other service activities 1.6
FISIM1 0.0
Overall 0.5
Source: Gross County Product Report 2019, KNBS. / Financial Intermediation Services Indirectly Measured
1

35/111
 El Wak-Rhamu Road Economic Feasibility Study Report

The 2017 GCP by economic activity in constant 2009 prices are as tabulated below.

Table 3-9: 2017 GCP by Economic Activity in Constant 2009 Prices (KSh million)

KShs Millions
Agriculture, forestry & fishing 7,486
Mining & quarrying 148
Manufacturing 20
Electricity supply 331
Water supply; waste collection 147
Construction 1,398
Wholesale & retail trade; repair of motor vehicles 1,067
Transport & storage 766
Accommodation & food service activities 64
Information & communication 526
Financial & insurance activities 661
Real estate activities 2,069
Professional, technical & support services 3
Public administration & defence 2,481
Education 2,392
Human health & social work activities 303
Other service activities 896
FISIM1 (34)
Overall 20,725
Source: Gross County Product Report 2019, KNBS
1 Financial Intermediation Services Indirectly Measured

Good infrastructure is, therefore, likely to ensure the integration of region into the
national economy with ASAL regions which accounts for 67% of the red meat and 12%
of the milk consumed in Kenya.

36/111
 El Wak-Rhamu Road Economic Feasibility Study Report

3.4 Population

According to the 2019 KPHC, Kenya’s population stood at about 47.6 million translating
to an average population growth rate of about 2.2% per annum between 2009 and 2019.
Meanwhile Mandera’s population stood at 867,457 during the 2019 census representing
a 15% decline compared to the 1,025,756 people registered during the 2009 census. As
per the KPHC, there was an estimated 125,763 households.

The 2019 population segregated by sub-county is as shown in Table 3-10 below.

Table 3-10: Mandera’s 2019 Population Breakdown by Sub-County

Sub-County Population Population Density Av. Household Size
Mandera West 98,300 24 6.9
Banisa 152,598 39 6.3
Kutulo 72,394 29 7.6
Lafey 83,457 22 7.2
Mandera Central 157,220 39 7.4
Mandera East 159,638 64 6.1
Mandera North 143,850 28 7.4
Total 867,457 33 6.9
Source: KNBS: 2019 Kenya Population and Housing Census. Volume 1

The current County Integrated Development Plan had estimated the population as at
2017 to be 1,399,503 with projections of the population increasing to 1,699,437 people
by 2022. This was, however, prior to the release 2019 official census results – which were
criticised by the County after revealing its population had indeed been declining. With
KNBS yet to produce new forecasts, it is difficult to predict future population trends for
the County. However, as with other infrastructure projects, most notably the Isiolo –
Moyale road improvement project, improvement of the project road corridor is likely to
translate into exponential transport demand.

37/111
 El Wak-Rhamu Road Economic Feasibility Study Report

3.5 Traffic Survey Methodology

Traffic Survey Locations

Traffic surveys were carried out between 30th July 2019 and 7th August 2019 at various
locations as detailed in Table 3-11 and Figure 3-5 below.

Table 3-11: Traffic Survey Details

Location Chainage Type of survey Date Remarks

4-day 12hr counts
Km 4+500 • Classified link 30th July – 5th
El wak Town & 3-day 24hr
(El wak Spur Road) counts August 2019
counts
• Junction counts 31st July, 1st & 3rd
Wargadud town Km 217+525 3-day 12hr counts
• NMT August 2019
• Junction counts 31st July, 1st & 3rd
Gari Town Km 251+250 3-day 12hr counts
• NMT August 2019
4-day 12hr counts
• Classified link 30th July – 5th
& 3-day 24hr
counts August 2019
counts
Rhamu Town Km 311+925 • NMT 31st July, 1st & 3rd
3-day 12hr counts
• O-D August 2019
30th July – 7th
• Axle Load 7-day 12hr counts
August 2019
Junction to Malka Km 1+150 31st July, 1st & 3rd
• Junction counts 3-day 12hr counts
Mari (Rhamu Town) (Rhamu Spur Road) August 2019
Junction to Garissa Km 3+050 31st July, 1st & 3rd
• Junction count 3-day 12hr counts
(Rhamu Town) (Rhamu Spur Road) August 2019

38/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Figure3-5: Traffic Survey Location

SURVEY LOCATIONS:
C1 - Classified Counts Elwak town (Km
4+500 Elwak Spur Road)
C2 - Classified Counts RhamuTown (Km
311+925)
J1 - Junction to Takaba near Wargadud
(Km 217+525)
J2 - Junction to Lafey near Gari (Km
251+250)
J3 – Junction to Malkamari (Km 1+150
Rhamu Spur Road)
J4 – Junction to Girissa (Km 3+050
Rhamu Spur Road)
NMT 1 – Wargadud Town (Km 217+050)
NMT 2 – Gari Town (Km 249+700)
NMT 3 – Rhamu Town (Km 3+225
Rhamu Spur Road)
OD – Near Rhamu Town (Km 311+925)
AX – Near Rhamu Town (Km 311+925)
Map

Vehicle Classification
During the surveys, the following vehicle classification was adopted (Table 3-12).

Table 3-12: Vehicle Classification

Category Description
1 Motorcycle/ Tuk-tuk
2 Private Car (≤5 Seats)
3 Large Car, 4WD, Utility Vehicle
4 Pick - Ups, Vans
5 Minibus/ Matatu (≤ 14 seats)
6 Small Bus (14 -29 seats)
7 Large Bus (> 29 seats)
8 Light Trucks – 2 axles (single rear wheel)
9 Medium Trucks (2 axles, double rear wheel)
10 Heavy Trucks (3 - 4 axles)
11 Articulated/ Draw-bar Trucks
12 Other vehicles including agricultural tractors, graders etc.

Classified Link Counts

Traffic flow data was obtained by continuously recording passing traffic by manual tally
counting. The 12-hour counts were carried out between 6.00 am and 6.00 pm while 24-

39/111
 El Wak-Rhamu Road Economic Feasibility Study Report

hour counts were carried out from 6.00 am to 6.00 am. Traffic from each direction was
recorded in 15-minute intervals by trained enumerators.

Turning Movement Counts

Similarly, to classified link counts, traffic flow data was also obtained by continuously
recording passing traffic by manual tally counting. Traffic for each movement was
recorded separately in 15mins intervals by trained enumerators.

Origin-Destination Surveys
OD surveys were conducted simultaneously with the traffic volume counts data. The
roadside interview technique was used for the OD survey. The method involved traffic
police officers stopping the vehicles at the Rhamu Town barrier for the enumerators to
interview the drivers. OD survey provided information on the travel pattern of vehicles
carrying freight and passenger traffic within the road network. It also provided
information regarding the purpose and frequency of travel, and commodity movement.

3.6 Traffic Survey Results

Average Daily Traffic (ADT)

To determine the ADT, the 12-hour flows had to be converted to 24-hour flows using the
''night factor'' i.e., 24/12-hour factor, which is the ratio of the full 24-hour traffic and the
12-hour traffic. The 12-hour counts were then expanded for all the days of traffic count
and accordingly the ADT was determined. The ADT was calculated as the average flow
for the 7 days in which traffic counts were carried out.

The 2019 ADTs are as summarised below (Table 3-13).

Table 3-13: 2019 ADTs

Articulated Trucks
Medium Trucks
Large car, 4WD

Pick-ups/ Vans

Heavy Trucks
Light Trucks

Location
Private Cars
Motorcycle

Large Bus
Small Bus
Matatu

Others

Total

Elwak 428 105 65 112 18 1 6 12 57 188 57 11 1,057

Rhamu 174 104 120 44 41 6 12 11 28 77 113 0 730
J1 Elwak Arm 281 42 39 65 3 3 14 27 24 50 9 0 558
J1 Rhamu Arm 232 63 47 70 5 1 9 23 29 49 13 0 541
40/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Articulated Trucks
Medium Trucks
Large car, 4WD

Pick-ups/ Vans

Heavy Trucks
Light Trucks
Location

Private Cars
Motorcycle

Large Bus
Small Bus
Matatu

Others

Total
J2 Elwak Arm 339 91 54 84 23 4 14 27 43 48 19 0 747
J2 Rhamu Arm 360 96 82 98 45 16 17 47 48 57 21 0 887
Average 302 84 68 79 23 5 12 25 38 78 39 2 753

A seasonal variation factor of 1.0 was then used to convert the ADT to AADT.

41/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Turning Movement Counts

The junction ADT TMCs are as summarised in Table 3-14 below.

Table 3-14: Junction TMCs

Medium Trucks
Large car, 4WD

Pick-ups/ Vans

Heavy Trucks
Light Trucks
Private Cars
Motorcycle

Art. Trucks
Large Bus
Small Bus
Junction Arm

Matatu

Other

Total
Rhamu 232 63 47 70 5 1 9 23 29 49 13 0 541
Takaba

Elwak 281 42 39 65 3 3 14 27 24 50 9 0 558

Takaba 234 53 53 64 6 2 7 32 14 22 16 0 504
Elwak 339 91 54 84 23 4 14 27 43 48 19 0 747
Lafey

Rhamu 360 96 82 98 45 16 17 47 48 57 21 0 887

Lafey 340 100 69 48 41 13 5 31 6 11 2 0 666
Malkamari 1,045 364 192 345 96 122 15 24 55 33 64 1 2,356
Malkamari/
Bulla Dana

Rhamu 1,130 392 262 505 207 242 48 46 38 55 116 2 3,043

Bulla Dana 1,130 375 185 359 174 112 38 35 57 51 74 1 2,591
Elwak 1,090 398 244 413 95 157 78 45 52 65 127 1 2,765
Mandera 1,655 783 509 975 354 200 77 153 166 274 900 3 6,050
Girissa

Elwak 1,904 976 521 1,067 451 245 87 194 203 376 1,090 3 7,116
Girissa 1,896 927 479 1,008 221 75 15 111 149 291 339 0 5,511

The data shows that majority of traffic at these junctions is composed of motorcycles. The
Malkamari/Bulla Dana Junction and the Girissa Junctions are located in Rhamu Town
hence the high traffic volumes.

Medium trucks are used to transport water from Wargadud to areas such as Gari,
Quorhanmadhow and Elwak. Vehicles transporting animals use the Takaba Junction to
access the Takaba-Wajir route as a better alternative route to the Elwak-Wajir route due
to insecurity and presence of police. The high number of heavy vehicles using the Takaba
junction may be due to the quarry located in Takaba.

At the Lafey Junction, higher traffic was experienced on Thursday and Saturday. This can
be attributed to the higher number of light trucks and medium trucks which travel to
Lafey as a convoy, for security purposes, to transport goods such as sugar and flour to
areas such as Bambo, Gari and Wargadud every Thursday, Saturday and Sunday.

42/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Non-Motorized Traffic (NMT) Findings

The average 12-hr 3-day NMT findings at three (3) of the main towns are as tabulated
below.

Table 3-15: 2019 NMT Findings

Handcarts & Animal

Pedestrians Bicycles Total
Drawn Carts
Wargadud Town 8,088 8 232 8,328
Gari Town 7,182 2 344 7,528
Rhamu Town 37,183 2 2,076 39,262

Animal-drawn carts are used in Rhamu Town to mainly ferry sand, firewood and water
while the high number of pedestrians are market traders. Suitable NMT facilities have
been proposed to handle these high NMT flows.

O-D Survey Findings

OD surveys were used to determine the traffic dispersal patterns, trip purposes,
occupancy levels and goods carried by the vehicles using the project road.

Table 3-16: OD Matrix

DESTINATION

Total
1 2 3 4 5 6 7 8 9 10 11 12 13 %

1-Wajir-Tarbaj 0 0 0 0 0 3 0 0 0 0 0 0 0 3 0%
2-Tarbaj-Kotulo 0 0 0 0 0 1 0 0 0 0 0 0 0 1 0%
3-Kotulo-Elwak 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0%
4-Elwak-Lafey 0 0 0 0 0 38 0 0 0 0 0 0 0 38 5%
5-Lafey-Rhamu 0 0 0 0 0 23 0 0 0 0 0 0 0 234 30
6-Rhamu-Mandera 3 0 0 5 18 4
2 1 0 4 2 4 0 0 347 %
44
7-Takaba 0 0 0 4
0 0 29 5
0 0 3
0 0 8
0 0 0 29 %
4%
ORIGIN

8-Buna 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0%
9-Malka-Mari 0 0 0 0 0 53 0 0 0 0 0 0 0 53 7%
10-Moyale 0 0 0 0 0 11 0 0 0 0 0 0 0 11 1%
11-Nairobi & its
0 0 0 0 0 65 0 0 0 0 0 0 0 65 8%
environs
12-Uganda,
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0%
Ethiopia, Sudan
13-Eastern 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0%
Countries (Somalia)
Total 3 0 0 5 18 43 1 0 4 2 4 0 0 781 100
% 0 0 0 4
7 0
23 6
56 5
2 0 3
6 0 8
6 0 0 100 %
% % % % % % % % % % % % % %

43/111
 El Wak-Rhamu Road Economic Feasibility Study Report

The OD data shows that 30% and 44% of all trips originated from Lafey-Rhamu and
Rhamu-Mandera respectively while 23% and 56% of the trips were destined from Lafey-
Rhamu and Rhamu-Mandera respectively. This shows that majority of the traffic along
the project road are local traffic. 8% of all trips originated from Nairobi, Mombasa, Meru
and Thika. Miraa is transported from Meru to Rhamu and Mandera due to the high
demand in these areas. Petrol is transported from Nairobi/Mombasa to Rhamu and
Mandera using 6 axle trucks.

a. Trip Purposes

In terms of trip purposes, 57% of the trips surveyed were work trips while 32% were
business trips hence revealing the economic significance of the project road. Trip
purposes are as presented in Table 3-17 below.

Table 3-17: Trip Purposes

Social
Schoo
Origin Home Work Business (Shopping/ Others
l
Recreation)
1-Wajir-Tarbaj 2 0 0 1 0 0
2-Tarbaj-Kotulo 0 1 0 0 0 0
3-Kotulo-Elwak 0 0 0 0 0 0
4-Elwak-Lafey 3 26 1 8 0 0
5-Lafey-Rhamu 8 187 4 31 0 4
6-Rhamu-Mandera 24 135 16 166 1 5
7-Takaba 0 25 2 2 0 0
8-Buna 0 0 0 0 0 0
9-Mari 6 31 1 13 1 0
10-Moyale 0 9 1 1 0 0
11-South of Wajir (Nairobi
3 31 1 28 0 1
and its environs)
12-Western Countries
0 0 0 0 0 0
(Uganda, Ethiopia, Sudan)
13-Eastern Countries
0 0 0 0 0 0
(Somalia)
Total 46 445 26 250 2 10
% 6% 57% 3% 32% 0% 1%

44/111
 El Wak-Rhamu Road Economic Feasibility Study Report

b. Types of Goods

The predominant types of goods carried are agricultural, livestock and food products at
75% at Wajir town in 2007 and 57% at Rhamu town in 2019. Rhamu and Mandera are
known to be agriculturally productive areas where fruits such as mangoes, watermelons
and lemons are grown. The main economic activity in North Eastern region is livestock
keeping. Therefore, livestock is mainly transported from the region to other parts of
Kenya.

17% of loads comprised of oil, gas, mining products and construction materials. Sand is
harvested along the Dawa River and transported to the neighbouring settlements for
construction purposes. There are also borrow pits located around Rhamu town which are
good sources for gravel.

Manufactured goods account for 10% and are mainly obtained from the Southern part
of Kenya such as Nairobi and transported to Rhamu and Mandera Towns.

80%
70%
60%
50%
40%
30%
20%
10%
0%
Agricultural and Manufactured goods Oil, gas, mining Empty Others
Livestock, food, products, raw
water, animal food, materials,
drinks construction
materials

Wajir-2007 Mandera-2007 Rhamu 2019

Figure 3-6: Type of Goods

45/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Vehicle Occupancy Rates

Vehicle occupancy rates are a key input in assessing the total travel time savings.
Estimated occupancy rates from the OD surveys are as presented below (Table 3-18).

Table 3-18: Vehicle Occupancy Rates

Vehicle Type Average Occupancy
Motorcycle 2.2
Car/Taxi 4.3
Jeeps/4wd 6.9
Van/Pickup 6.4
Minibus/Matatu 12.3
Small bus 14.3
Large Bus 47.1

3.7 Base Year and Design Year

The traffic surveys were carried out in July/August 2019. It has been assumed that the
design review and documentation shall be completed by 2021. Further it has been
estimated that procurement process of a Contractor and a Consultant shall take
approximately 1-year and the commencement of construction shall be in 2022. An
additional 36 months has also been allowed for construction. The earliest time of opening
of the road shall, therefore, be 2025.

The year 2025 is therefore the assumed base year, with 2035 and 2045 assumed as the
design years for geometric traffic and pavement loading analysis respectively.

46/111
 El Wak-Rhamu Road Economic Feasibility Study Report

3.8 Traffic Forecasting

Traffic growth rates has been derived from amongst others historical GDP growth, new
registration for motor vehicles, fuel sales, population growth etc. These factors are
discussed herein.

Population Growth
Population growth has a bearing on transport demand hence the need to review trends
in population changes over time. Mandera County’s total population during the 2009
Population and Housing Census was indicated as 1,025,756 persons. Although it has been
used in the preparation of various documents, including the County Integrated
Development Plans (CIDPs) 2013-2017 and 2018-2022, that figure was among those
considered anomalous by the government during release of the census results. Results
of the 2019 Census indicated that the population for Mandera was 867,457 persons. Given
that the County’s population in 1979, 1989 and 1999 was recorded as 106,000, 124,000
and 250,000, respectively, the County’s population growth rate is estimated at about 5.6%
p.a. which is still quite high. This estimate is made on the assumption that the population
census for 2019 is correct. The accuracy of the doubling of population between 1989 and
1999 is also doubtful.

Table 3-19: Population Trends in Mandera

Year 1979 1989 1999 2009 2009 2019

Population 106,000 124,000 250,000 - 1,025,756 867,457
Source: KNBS, Kenya Population and Housing Census

In view of these factors use of population growth rate in the County seems rather unsafe.

Gross Domestic Product and Land Transport & Storage

Kenya’s economy has enjoyed steady growth since the turn of the millennia averaging
about 5.6% annually over the last 5 years. Table 3-20 below shows growth of Gross
Domestic Product at constant (2009) prices during the period 2015-2019.

Table 3-20: GDP Growth Rates (%), 2013-2018

Year 2015 2016 2017 2018 2019*

GDP Growth at Constant (2009) Prices (%) 5.7 5.9 4.9 6.3 5.4
Source: KNBS, Economic Survey 2020
* Provisional

47/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Gross County Product (GCP)

For the first time the KNBS has published Gross County Product (GCP) (the equivalent of
the national GDP) for all the Counties in Kenya. Trends in GCP for Mandera County
between 2013 and 2017 are presented in Error! Reference source not found. below.

Table 3-21: GCP at Constant 2009 prices

Year 2013 2014 2015 2016 2017
GCP (KShs. Million) 17,418 18,230 19,044 19,889 20,725
Growth (%) - 4.7% 4.5% 4.4% 4.2%
Source: KNBS (2019)

Mandera County has recorded a slightly declining GCP growth between 2013 and 2017
averaging about 4.5% per annum, which is below the national economic growth rate
during the period.

Since growth in transport and storage has been shown to have a linear correlation with
the GDP/GCP, the concept of elasticity of transport in relation to changes in GDP has
been considered in traffic forecasting with the adopted medium growth rates generally
being in tandem with projected GDP/GCP growth rates of between 4% and 10%.

Petrol Demand
The growth in vehicle proportions has also had a direct impact in the demand
for petroleum products as shown in the figure below. Fuels sales at retail
pump outlets are closely tied to the petroleum demand. As shown in Error!
Reference source not found., the growth in demand for Motor Gasoline
(premium) and Light Diesel Oil has each nationally averaged 6.6% per annum.
Between 2014 and 2018. The total average demand for both fuels grew at
8.1% each year. Figure 3-7: Fuel Sales from Retail Pump Outlets

further illustrates trends in these growth rates.

Table 3-22: Petroleum Demand, 2024-2018 in ‘000 Tonnes

Average
Annual
2014 2015 2016 2017 2018*
Growth
Rate (%)
Motor gasoline (premium) 903.8 1,107.0 1,227.2 1,267.4 1,359.0 6.6
Light diesel oil 1,721.4 2,080.9 2,318.3 2,086.2 2,173.1 6.6
Total 2,625.2 3,187.9 3,545.5 3,353.6 3,532.1 8.1
Retail pump outlets & road
2,791.0 3,414.7 3,717.6 3,541.2 3,743.0 8.0
transport
Source: KNBS, Economic Survey 2019

48/111
 El Wak-Rhamu Road Economic Feasibility Study Report

* Provisional

Fuel Sales from Retail Pump Outlets

Figure 3-7: Fuel Sales from Retail Pump Outlets

has averaged about 8.0% per annum over the last 5 years.

30.0%

25.0%
22.3%
Annual Growth Rate (%)

20.0%

15.0%

10.0%
8.4% 8.9%
5.0% 5.7%

0.0%

-5.0% -4.7%

-10.0%
2014 2015 2016 2017 2018*
Year

Figure 3-7: Fuel Sales from Retail Pump Outlets

Source: KNBS, Economic Survey 2019.

Number of Newly Registered Motor Vehicles

As shown in the figures below, the number of newly registered motor vehicles has
experienced mixed trends over the last 5 years. These have been attributed to changes in
economic performance and government tax policies over the period under consideration.

Generally, there has been a drop in new registration of personal vehicles (Figure 3-8) over
the last 3 years which has been attributed to higher import taxes which were imposed on
used cars in the 2015/16 financial year.

49/111
 El Wak-Rhamu Road Economic Feasibility Study Report

30%
28.0%
20% 20%
16.0%
Annual Growth(%)

14%
10% 10% 10%

0% 1.1%
-3%
-10% -10% -9% -8% -8.3%
-13% -14.8%
-20%
-22%
-30%
2014 2015 2016 2017 2018* 2014 2015 2016 2017 2018* 2014 2015 2016 2017 2018*
Saloon Cars Station Wagons Panel Vans,Pick-ups

Figure 3-8: New Registration of Personal Vehicles

Source: KNBS: Economic Survey 2019.

As shown in Figure 3-9: New Registration of Public Transport Vehicles

below, the number of registered buses and matatus has also been in the decline over
the last 3 years. This has been attributed to “squeezed” access to capital following the
introduction of the interest rate ceiling law 2016.

200%
173%
150%
Annual Growth(%)

100%
77%
50%

0% 7% 6.0% -1%
-9% -11% -12%
-24.6%
-39%
-50%
2014 2015 2016 2017 2018* 2014 2015 2016 2017 2018*
Buses and Coaches Mini Buses/Matatu

Figure 3-9: New Registration of Public Transport Vehicles

Source: KNBS, Economic Survey 2019

Similarly, within the category of commercial vehicles, Figure 3-10: New

Registration of Trucks & Trailers

shows that apart from wheeled tractors, registration of trucks and trailers has also been
on a downward trend since 2015 possibly owing to the prevailing unfavourable economic
environment.

50/111
 El Wak-Rhamu Road Economic Feasibility Study Report

90.0% 88%

70.0% 75%

50.0%
Annual Growth(%)

30.0% 34%
29.1%

10.0% 11.6%
7%
0%
-10.0% -13%
-23% -26.4%
-30.0% -30% -28% -31%
-35.8%
-50.0% -47%

-70.0%
2014 2015 2016 2017 2018* 2014 2015 2016 2017 2018* 2014 2015 2016 2017 2018*
Lorries/Trucks Trailers Other vehicles

Figure 3-10: New Registration of Trucks & Trailers

Source: KNBS, Economic Survey 2019

Conversely, the number of newly registered motorcycles and 3-wheelers

increased tremendously since 2016 as depicted in Figure 3-11: Motorcycles
and 3-Wheelers

Source: KNBS, Economic Survey 2019

. This, according to the Economic Survey 2019, is partly attributed to the removal of excise
duty on motorcycle imports in September 2016.

60%
56%
50%
Annual Growth (%)

40% 39%
35%
30%
20% 21% 21%

10% 10%
0% 1%

-10% -11% -11.1%

-20% -20.1%
-30%
2014 2015 2016 2017 2018* 2014 2015 2016 2017 2018*
Motor & Auto Cycles 3-Wheelers

Figure 3-11: Motorcycles and 3-Wheelers

Source: KNBS, Economic Survey 2019

51/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Earnings from Road Traffic

Figure 3-12: Earnings from Road Traffic

shows that earnings from road traffic from both road passenger and freight transport
have registered a steady annual average growth rate of about 9% over the last five years
with passenger traffic outpacing freight traffic over the 5-year period. This shows the
growth in transport demand for commercial traffic.

20%
18%
16%
15%
14% 14%
Annual Growth (%)

12% 12% 12%

10%
8% 9% 8%
6%
5% 5%
4%
3% 3%
2%
0%
2014 2015 2016 2017 2018* 2014 2015 2016 2017 2018*
Passenger Traffic Freight Traffic

Figure 3-12: Earnings from Road Traffic

Source: KNBS, Economic Survey 2019

Historical Traffic Growth

Using the 2007 and 2019 traffic survey data presented in section Error! Reference source
not found. of this report, the average annual historical traffic growth rates over this
period are as shown in Error! Reference source not found. below.

Table 3-23: Historical Traffic Growth

Private Cars
Motorcycle

Articulated
Large cars

Minibuses
Matatu &

Medium
& Vans

Overall
Trucks

Trucks

Trucks

Trucks
Buses

Heavy
Large

Light

El wak 883% 138% 21% 5% 17% 1% 17% 104% 51% 61%

Rhamu 1442% 64% 37% 122% 17% 10% 31% 56% 149% 71%

The findings indicate reasonable growth in traffic during the intervening period most
probably due to the ongoing improvements of the project road coupled with improving
economic fortunes of the region. The growth rates are, therefore, likely to be from
suppressed demand and are thus likely to be short-term.

52/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Summary of Growth Rates

A detailed analysis of the growth rates from economic indicators gives varying rates
including unsustainably high or exceptionally low growth rates. The rates of growth
derived from each source were therefore mainly considered while assessing the order of
magnitude of the expected traffic growth as they should ideally be complimentary to one
another in obtaining rates for forecasting purposes. In selecting the suitable growth rates
to adopt, only growth rates between 1% and 20% were considered for both forecasting
and sensitivity analyses. Error! Reference source not found. below summarise the
growth rates that have been considered.

Table 3-24: Summary of Growth Rates from Various Sources

Registration

Population
Fuel Sales

Historical
Transport/

Demand
Storage

Earning

Petrol
Vehicle
New
GDP

GCP

category

Motorcycles/ 1.4 & 883-

- 3.3,7.2,
Tuk-tuk 21.2 1442
10.9 &
Saloon Car/ 1.1,10,16 64-
- 16.7
Station Wagons & 19.9 138
10.4 &
Pick-ups & Vans - 21-37
13.7 5.7,
4.9 4.2 2.2, 4.2,
Matatus & 8.4
– – 4.6, 5.3 - 2.9, 1.54 5-122
Minibuses 4.2, &
6.3 4.7 & 6.3 5.1,11.9 &
Buses & 6.0 & 7.5 & 8.9
13.9 17
Coaches 7.2 11.4
Lorries/ Trucks 5.5,8.0,8.6,
6.7 &
12.4 & 1-150
Trailers 11.6
15.1
Others - - -

53/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Adopted Traffic Growth Rates

The traffic volume trend of the project road depends on the existing traffic generating
factors within the project area of influence and the general road network condition.
Assuming no significant change takes place, the normal traffic growth for the classified
vehicle types will be based on the annual average daily traffic count undertaken in 2019
forecasted using the growth factors from the National GDP growth, population growth
of Mandera county and fuel consumption. The growth of motorcycle was based on the
national registration as per the Kenya National Bureau Statistics Survey Report.

The below univariate series model was used to derive the growth factors as shown in the
Error! Reference source not found. below.

x_t=δ+ϕ_1 x_(t-n)+w_t

Where ϕ_1 is the coefficient value (factor growth) of the proxy variable in relation
to traffic growth.

“x_t” is the value of the variable at time “t” depending on the “x_ (t-n)” which is
the past observation of n number of periods.

From the iteration of the models the growth factors adopted in short run and long run is
tabulated below for normal traffic growth.

Table 3-25: Traffic Growth Scenarios (Low, Medium & High)

Vehicle Class 0-5 5-10 10 -20

Articulated Trucks 6.8 5.6 4.0
Heavy Truck 5.7 5.6 4.0
Medium Truck 3.7 5.6 4.0
Light Truck 2.7 5.6 4.0
Large Bus 3.2 5.6 4.0
Small Bus 2.9 7.2 4.0
Mini-bus (Matatu) 4.0 7.2 4.0
Pick-up Utility 7.0 7.5 4.0
4 Wheel Drive 7.0 6.3 4.0
Car 8.0 8.4 7.0
Motorcycles 11.0 10.4 8.0

54/111
 El Wak-Rhamu Road Economic Feasibility Study Report

3.9 Normal, Diverted and Generated Traffic

Normal traffic comprises traffic which uses the road even without the project while
diverted traffic refers to traffic that changes from an alternative route to/from the project
road, but still travels between the same origin and destination. Generated traffic on the
other hand is the additional traffic due to improvement of the road and can either be
induced or converted traffic.

Normal Traffic
Normal traffic comprises traffic which uses the road without the project and will mainly
grow at a rate that takes into account various factors. These include demographic
characteristics such as population density, growth rates of the country’s economy in terms
of GDP and income per capita, level of motorization at both national level and in the area
traversed by the project road, economic activities and development potential of the areas,
vehicle ownership levels & trends and fuel prices.

The project road is part of the North Eastern Improvement project (NETIP), aimed at
upgrading 740km of road between Isiolo to Mandera with a bid to open the north eastern
part of Kenya. The project will improve the economic potential of the area in terms of
livestock farming, provision of fibre optic cable lines, government service centres
(Huduma centres) among others. This is an important factor that will increase the traffic
volumes and therefore considered in analysis.

The normal traffic (AADT) as per the year 2019 count is as summarised in Table 3-26
below.

Table 3-26: Normal Traffic for the Project Road as at 2019

Medium Trucks
Large car, 4WD

Pick-ups/ Vans

Heavy Trucks
Light Trucks
Private Cars
Motorcycle

Articulated
Large Bus
Small Bus
Matatu

Others
Trucks

Total

Elwak-Rhamu 302 83 68 79 22 5 12 25 38 78 39 2 753

Source: Consultant’s Designs

The traffic was updated to reflect current volumes since the counts were undertaken in year 2019.
The main factors expected to have contributed to the growth of traffic includes the impact of
devolution, increased activities of non-governmental activities in the region and livestock trade in
Mandera, Isiolo and Garissa.

55/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Table 3-27; Normal Traffic for the Project Road as at 2021

Mini-bus (Matatu)
Articulated Trucks

Medium Truck

Pick-up Utility
4 Wheel Drive

Heavy Truck

Motorcycles
Light Truck
Large Bus

Small Bus
Section

Total
Car
Access Roads 52 3 51 20 5 16 26 12 314 61 1 561
Km 177 to Km 228 74 65 135 210 6 13 61 19 527 128 1 1239
Km 228 to Km 308 78 44 97 87 13 26 43 24 372 90 5 879

Diverted Traffic
This comprises traffic that is attracted from other roads to the project road due to
improved road conditions that lead to reduced vehicle operation costs, reduced travel
times and higher speeds. They however still maintain the same origins and destinations.

The Elwak-Rhamu section was recently improved from a murram road to a low volume
sealed road thereby attracting vehicles to the road. The generated and diverted traffic
from the improvement of the road was captured during the traffic survey. Although the
improvement increased traffic along the route, some trucks traversing from Elwak to
Mandera prefer using the Elwak-Lafey-Fino-Mandera route which is comparatively
shorter. These trucks are mainly fuel trucks driven by locals who are more familiar to the
route. Therefore, unless the upgrading of the road is done until Mandera there may be
little diversion of traffic from this route. Additionally, if security along the Elwak-Lafey-
Fino-Mandera route is improved and the construction works by Kerra are completed,
traffic would divert from the Elwak-Rhamu Road to this route.

Currently, buses travelling to and from Nairobi using the Mandera-Wajir route, are only
allowed to carry locals due to insecurity along the Kotulo - Elwak section. Consequently,
non-locals are forced to use a longer route, that is, Mandera - Rhamu – Banisa – Takaba
– Moyale – Isiolo – Nairobi. At the time of the O – D Survey, there were two (2) large
buses and five (5) land cruisers daily using the route. This route takes 30 hours for the
passengers to reach their destination while also having a high-cost implication. It is
expected that once the road is constructed, the security along the Wajir-Mandera Road
shall improve therefore reducing the operating costs for buses and increasing the number
of trips.

56/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Generated Traffic
The upgrading of the current road to bitumen standards is expected to greatly improve
security in the area therefore significantly increasing traffic along the road. Generated
traffic is the additional vehicle traffic that results from road improvement. Poor road
conditions cause people to defer trips that are not urgent, choose alternative destinations
or modes, and forego avoidable trips.

The generated traffic growth for the study was derived from the current normal traffic
volume considering the elasticity coefficients (growth factors) of number of trips and road
user costs. The change was observed to be elastic showing that the number of trips or
change of use of means of transport is so sensitive to transport cost.

The growth factor were determined as follows;

Table 3-28: Assumed Generated Traffic Growth

Vehicle Class % to Normal Traffic at Year 3

Articulated Trucks 14
Heavy Truck 25
Medium Truck 17
Light Truck 22
Large Bus 14
Small Bus 9
Mini-bus (Matatu) 23
Pick-up Utility 18
4 Wheel Drive 22
Car 41
Motorcycles 7

Summary of Normal, Diverted and Generated Traffic

The diverted and generated traffic shall be applied to the normal traffic obtained in the
opening year 2025.

A summary table showing the normal, diverted, and generated traffic is shown in Table
3-29 below.

57/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Table 3-29: Normal, Diverted and Generated Traffic

Light Truck

Motorcycle
Articulated

Large Bus

Small Bus
Base Year

Mini-bus
(Matatu)
Medium
4 Wheel

Pick-up
Section

Trucks
Traffic

Heavy

Utility
Truck

Truck
Drive
Type

Car
Access Roads Normal 52 3 51 20 5 16 26 12 314 61 1
Km 177 to Km 228 Normal 74 65 135 210 6 13 61 19 527 128 1
Km 228 to Km 308 Normal 78 44 97 87 13 26 43 24 372 90 5

2025 Access Roads Normal 68 4 70 25 6 18 30 14 477 80 1

Generated 15 1 29 6 1 4 5 3 33 14 0
Total 82 5 98 31 7 21 35 17 510 94 1
Km 177 to Km 228 Normal 98 84 184 262 7 14 71 23 801 168 1
Generated 21 12 75 66 1 3 12 5 56 30 0
Total 119 96 260 328 8 17 83 28 857 198 1
Km 228 to Km 308 Normal 102 58 132 109 15 29 50 28 565 119 6
Generated 22 8 54 27 2 6 8 6 40 21 1
Total 125 66 186 136 17 36 58 34 604 140 7
Source: Update of the Consultant’s Designs

3.10 Geometric Design Capacity

Geometric design capacity has been assessed using Tables 4.2.1 and 4.2.2 of the RDM
Part I. The forecasted AADT PCUs for the 10-year geometric design year are as
summarised in Table 3-30 below.

Table 3-30: 10-year Traffic Forecast in PCUs

Growth 10-year AADT Possible Cross Section

Cross Section Type
Rates (pcu) Type
Low 3,037 II or III
Medium 4,554 II II
High 13,961 II
Source: Consultant’s Designs

From the findings, cross-section Type II (7 m carriageway and 2.0 m shoulders) is

recommended.

3.11 Pavement Loading Analysis

For pavement loading design, axle load surveys for heavy traffic were carried out as part
of the traffic surveys. The findings were used to determine the Equivalence Factors (EFs)
as provided below (Table 3-31).

58/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Table 3-31: Sample Size and Vehicle Equivalent Factors

Northbound Southbound
Vehicle Type
No. EF No. EF
Large Bus 16 1.44 19 4.35
Medium Truck (2axles) 18 0.95 37 2.05
Heavy Truck (3 axles) 40 3.17 48 3.73
Articulated truck (>5 axles) 5 5.95 16 6.38

Use the southbound EF factors and the growth rates, the forecasted 15-year and 20-year
cumulative equivalent standard axles are as shown in Table 3-32 below.

Table 3-32: Cumulative Standard Axles (CSA)

Period Design Life Low Medium High
15-years CSA 11,231,365 14,118,772 31,120,059
(2040) Traffic Class T2 T2 T1
20-years CSA 15,848,622 20,749,477 58,594,265
(2045) Traffic Class T2 T2 T1
Source: Consultant’s Designs

The road has, therefore, been designed to traffic class T2.

59/111
 El Wak-Rhamu Road Economic Feasibility Study Report

4 Engineering Design Aspects

4.1 Geology and Soil Conditions

The geological formations encountered along the project road are as tabulated below
and range from recent formations to Jurassic aged formations.

Table 4-1: Geological Formations

Approx. Geological
Geological Description
Chainage (km) Scale Age
174 – 183 Pleistocene Elwak series-Kunkur limestone
183 -193 Pleistocene Elwak series-Gypsite
193 – 205 Pleistocene Elwak series-Kunkur limestone
205 – 231 Recent Reddish brown sandy soils
231 – 234 Cretaceous Sandstones with intercalated siltstones
234 – 244 Cretaceous Alternating sandstones, mudstones and siltstones
244 – 261 Jurassic Coquinoid oolitic limestones with sandy limestones
261 – 267 Jurassic Shelly limestones with thin sandstone and sandy limestones
267 – 276 Jurassic Coquinoid oolitic limestones with sandy limestones
Densely argillaceous limestones with interbedded calcareous
276 – 281 Jurassic
shells
281 – 295 Recent Red dusty soils
295 – 303 Recent Calcareous crustal deposits
303 – 313 Recent Reddish brown sandy soils
313 – 324 Pleistocene Limestone, cherts and gypsum

The in-situ subgrade support is tabulated below according to homogeneous sections

(Table 4-2). The subgrade class ranges from S2 to S5 with sections having S2 and S4 in-
situ subgrade proposed to be improved to S5 class.

Table 4-2: Alignment Soils CBR

From To Length CBR (%)

Section RDM III Class
(km) (km) (km) Mean Min
1 177 228 51 14 2 S4
2 228 308 80 7 2 S2
3 308 316 8 29 22 S5
Source: Consultant’s Designs

60/111
 El Wak-Rhamu Road Economic Feasibility Study Report

4.2 Construction Material Sources

A total of 23 No. gravel material sites have been prospected with an approximate material
yield of about 849,000m3. Tests have indicated that improvement with 3% and 4% cement
makes the material suitable for subbase and base use respectively.

Also, seven (7) hardstone quarries two (2) sandstone sources have also been sampled and
tested for suitability of use. The hardstone quarries are found to be suitable for both
asphalt concrete and surface dressing while the sandstone sources met the specifications
required as per BS 3148:1980. The hardstone quarries are well distributed along the
alignment unlike the sand sources which are situated away from the alignment.

Due to lack of a perennial rivers crossing the project road, construction water is expected
to be sourced mostly from boreholes and water pans. The only river is found 1km north
of Rhamu town at the Kenya-Ethiopia international boundary and is known as River Daua.

4.3 Topography and Alignment Characteristics

The terrain rises to about 730 m in El Wak before dropping to about 257 m above the
mean sea level in Rhamu town with hills found on the right near the border of Kenya and
Somalia.

The alignment generally traverses a low-lying flat terrain with the following assumed
geometric characteristics (Table 4-3).

Table 4-3: Alignment Characteristics

Parameter Value Unit
Rise + fall 10 m/km
No. of rises + falls 2 no./km
Average horizontal curvature 15 deg/km
Source: KRB (2018). Calibrated Kenyan HDM-4 Workspace

61/111
 El Wak-Rhamu Road Economic Feasibility Study Report

4.4 Climatic Conditions

The project road lies within the Arid Climatic Zone. The climate input data for this climatic
zone is as summarised below (See Table 4-4).

Table 4-4: Climate Input Data

Parameter Value Unit
Zone Climate Zone I -
Moisture Index -53.2 -
Duration of Dry Season 9.7 months
Mean monthly precipitation 36.1 mm
Mean Temperature 26.7 °C
Avg. Temperature Range 10.5 °C
Days T>32° C 256 No.
Freeze Index 0 -
Driving on water covered roads 1 %
Source: KRB (2018). Calibrated Kenyan HDM-4 Workspace

4.5 Existing and Proposed Design

Start and End Point

Being part of the wider 740km Isiolo – Wajir – Mandera road corridor, the El Wak – Rhamu
section lies between Km 177 and Km 316. El Wak town lies at Km 177 while Rhamu town
lies at Km 316.

Cross-section and Right of Way (ROW)

The existing carriageway is 7m wide with 1.5m shoulders on both sides. The re-
classification of the road from Class B standards (i.e., B9) to Class A standards (i.e., A13),
will require the widening of the shoulders to 2.0m.

The cross-section has also been modified in urban sections to include side drains and
2.0m wide pedestrian footpaths.

Further, the road traverses trust land owned by Mandera County and has a ROW of 60m.

62/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Geometric Design Standards

The road has been designed for a design speed of 120km/h in line with the requirements
of Table 3.7.1 of RDM I. The design parameters reviewed include: -

• Vertical Alignment: - The design meets the minimum length of vertical curves,
maximum gradients and super-elevation. There is, however, a short section
between Km 278 and Km 288 where the maximum gradient of 3% is exceeded.

• Horizontal Alignment: - The design meets the minimum curve radius, length of
straights between curves and transition curve parameters. A 3.8 km spur road has
been designed around Rhamu town (Km 312 to Km 315) in a bid to incorporate a
loop road to serve the town and retain desired design speeds along the main
highway.

Provisions for adequate road furniture and traffic calming measures (in the built-up areas)
have also been made in the Bills of Quantities. Bus bays have been proposed at Wargadud
market, at Quorhan Mothow market, at Gari village (including a lorry parking) and at
Rhamu township.

Pavement Options
The El Wak – Rhamu section was recently upgraded to bituminous standards up to Km
313 using the staged-construction approach. The pavement structure comprises of
275mm thick sub-grade and 200 mm thick sub-base with a double seal surface dressing.

Improvement shall involve strengthening this pavement to support Traffic Class 2. The
proposed pavement options consist of the following layers:

Table 4-5: Pavement Options

Layer Option 1 Option 2 Option 3

Surfacing 75mm AC Type I Double Surface dressing 50mm AC Type I (Super
(Super pave) (14/20 + 6/10) pave)
Base 150mm Cement 200mm Cement 200mm Cement Stabilised
Stabilised Gravel Stabilised Gravel (UCS 1.5 Gravel (UCS 1.5-3.0MPa)
- 3.0 MPa)
Subbase 175mm Cement 200mm 200mm Cement Stabilised
Improved Gravel Cement Stabilised Gravel Gravel (UCS 0.75-1.5 MPa)
(UCS 0.75-1.5 MPa)
Subgrade Improved to S5 sub- Improved to S5 sub- Improved to S5 sub-grade
grade class grade class class

63/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Intersections
There are no major intersections between El Wak and Rhamu with most junctions
involving intersections between the project road and those of roads classes D and E. The
notable junctions along the project road section are as tabulated below.

Table 4-6: Main Intersections

Chainage Intersecting Roads Remarks
Km 185 A13/E847 An alternative route to Mandera from El Wak via Arabia
Km 196.9 To Somalia
Km 217.5 A13/E843 At Wargadud to Takkaba
Km 247 A13/D501 At Gari to Bamasa
Km 290 A13/D504 At Rhamu to Banissa
Km 315 A13/E846 At Rhamu to Malkamari.

These junctions are recommended to be upgraded to standard junction Type B as

recommended in RDM Part I (See Figure 4-1).

Figure 4-1: Layout of Standard Junction Type B

Source: RDM Part I

64/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Drainage and Structures

The road traverses a predominantly flat terrain characterized with undefined flow
channels dominated with sheet flows. There are no perennial rivers or streams crossing
the entire alignment.

There a total of 77 No. catchments ranging in size from 0.2 km2 to 2,400 km². These
catchments were delineated and various design parameters extracted e.g., slope, area
and length of longest flow path etc. The peak flows were then estimated using either the
Rational method (Catchment Area < 5 km2); the East Africa Flood Model (Catchment
Areas <200 km2); and, the United States Soil Conservation Service Method (Catchment
Areas ≥ 200 km2).

The flood forecast was based on the Kenya Rainfall Atlas, with a 24-hour·2-year rainfall of
60mm adopted. Rainfall growth factors for 10, 25 and 50 years from the TRRL Flood Model
report No. 623 were used to develop floods with different recurrence intervals.

Hydraulic models were then used to determine the type and size of drainage structures
required. A flood with a 10-year recurrence period was adopted for design of pipe
culverts, while a flood with a 25-year return period was adopted for the box culverts and
a flood with a 50-year recurrence period was adopted for bridges.

Currently there are 159 No. drainage crossings of various types. To improve drainage, all
these structures are to be replaced with adequately sized ones and additional structures
provided. Table 4-7 below summarises the existing and proposed drainage structures.

Table 4-7: Existing/Proposed Drainage Structures

Existing Structures Proposed Structures
Type (Día/ Size) No. crossing Type (Día/ Size) No. crossing
locations locations
CPC - 2x 0.6m dia 58 CPC – 0.9m dia x 1 69
CPC - 3x0.6m dia 1 CPC – 0.9m dia x 2 172
CPC - 1x0.9m dia +1x0.6m dia 1 BC (2mx1.5m) x 1 cell 16
CPC – 0.9m dia x 1 43 BC (2mx1.5m) x 2 cell 76
CPC – 0.9m dia x 2 23 BC (2mx1.5m) x 3 cell 8
CPC – 0.9m dia x 3 1 BC (2mx1.5m) x 4 cell 22
Armco pipe culvert 1.5m dia 1 BC (2mx1.5m) x 6 cell 2
Vented drift 1.2m dia x 2 pipes 1 BC (3mx2.5m) x 2 cell 2
BC (4.5m x 2.5m) x3 cells 1 BC (4mx2.5m) x 4 cell 1
BC (4mx2.5m) x 8 cell 1
Totals 159 369
Note: CPC-Concrete Pipe Culverts; BC-Box Culvert

65/111
 El Wak-Rhamu Road Economic Feasibility Study Report

The standard side ditch Type B3 made up of a 1:4 side slope and a height of fill < 1m has
been proposed (Figure 4-2). This type of side ditch is suitable for the flat open terrain
traversed by the project road.

Figure 4-2: Standard Side Ditch Type B.3 (RDM-1)

4.6 Road Sections

The homogenous road sections have primarily been derived based on homogeneity in
traffic flows, urban influence and pavement type. The homogenous road sections are as
presented in the Table 4-8 below.

Table 4-8: Road Sectioning Data

Approx. Chainage Length (km) Surfacing Type Alignment Soil CBR
Km 177 to Km 228 51 Bituminous 14
Km 228 to Km 308 79.4 Bituminous 7
Gari Town (Km 250 to Km 251) 0.6 Bituminous 7
Km 308 to Km 316 8 Bituminous
29
Rhamu Town (Km 313 to Km 316) 3.8 Gravel
Total length 142.8
Source: Consultant’s Design

4.7 Project Costs

The components of costs include the following amongst others:

i. Construction cost (including the cost of bridges and other structures);
ii. Land acquisition and resettlement cost;
iii. HIV/AIDS and road safety awareness campaigns;
iv. Environment management cost during construction;
v. Physical and price contingencies; and,
vi. Value Added Taxes.

The unit costs have been derived from first principles and moderated with rates
ongoing/completed similar projects such as (1) 50km Loichangamatak – Lodwar Road
66/111
 El Wak-Rhamu Road Economic Feasibility Study Report

(A1) tendered in March 2016; (2) 80km Lokituang - Kaloboyei Road (A1) tendered in
February 2016; (3) 80km Lodwar- Lokituang road (A1) tendered in February 2016; 122km
Marsabit-Turbi road (A2) 122km tendered in January 2010; and, (5) 123km Turbi-Moyale
Road (A2) tendered in September 2011.

Table 4-9 below summarises the estimated financial costs of the project.

Table 4-9: Estimated Project Costs (KShs)

Section Option 1 Option 2 Option 3

Elwak-Gari 10,271,424,523.95 9,305,735,616.45 10,208,092,873.95
Gari-Rhamu 9,206,649,010.95 8,272,836,033.45 9,157,381,998.45
Total 19,478,073,534.90 17,578,571,649.90 19,365,474,872.40
Average Cost/km 141,247,813.89 127,473,325.96 140,431,289.87
Source: Consultant’s Estimates

For the maintenance works considered in the analysis, the unit costs are as tabulated
below (Table 4-10).

Table 4-10: Road Maintenance Costs

Financial Costs
Intervention Units
(KSh)
50mm Overlay Per m3 1,500
Drainage Works Per km 50,000
Edge Repair Per m 2
3,200
Paved Sections
Pothole Patching Per m 2
3,000
Routine Miscellaneous Per km per year 32,000
Works
Light Grading Per km 50,000
Spot Re-gravelling Per m 3
2,500
Unpaved
Routine Miscellaneous Per km per year 22,400
Sections
Works
Drainage Works Per km 20,000
Source: Calibrated Kenyan HDM-4 Workspace

67/111
 El Wak-Rhamu Road Economic Feasibility Study Report

5 Environmental & Social Safeguards (ESS)

ESS have been carried out in compliance with the requirements of both the National
Environment & Management Authority (NEMA) and applicable international standards.

Amongst the identified environmental impacts included Noise pollution; Air pollution;
Water pollution; Increased consumption of fossil fuel; Generation of solid waste; and, Soil
quality degradation due to oil spills amongst others. The social impacts are expected in
town centres where some realignments have been proposed leading to loss of property
and land. A detailed record of Project Affected Persons (PAPs) and Land/ Asset Valuation
Reports have been prepared in line with the regulatory requirements.

These negative impacts are remediable with the implementation of the proposed
Environmental and Social Management Plans (ESMPs), Vulnerable & Marginalized Group
Plans (VMGPs), Occupational Health & Safety Management Plans (OHSMPs) and
Resettlement Action Plans (RAPs) and the Resettlement Action Plans (RAPs). The project
should, therefore, be allowed to proceed to the implementation stage.

68/111
 El Wak-Rhamu Road Economic Feasibility Study Report

6 Assessment Benefits

6.1 Appraisal Methodology

The appraisal methodology has been premised on the Cost-Benefit Analysis approach
and further hinged on the Consumer Surplus Approach given the fact that the traffic
volumes exceed 250 vehicles per day. The adopted approach is as summarised below: -

1. Defining the road network whereby homogenous sections within the road
network are identified and classified together based on traffic volumes, surface
condition, pavement strength, geometric properties, alignment soil properties etc.

2. Collection and review of all relevant data including traffic volumes, traffic growth
rates, existing and proposed pavement structures, alignment soil characteristics,
future pavement maintenance regimes, climatic conditions, and geometric
characteristics amongst others;

3. Derivation of basic and economic vehicle fleet characteristics;

4. Estimation of project costs for the “without” and “with” project;

5. Calculation of Net Present Value (NPV), Economic Internal Rate of Return (EIRR),
Benefit – Costs Ratio (BCR) and First Year Rate of Return (FYRR) using HDM – 4
over a 20-year analysis period;

6. Determination of whether the economic benefits outweigh the economic costs;

7. Computation of switch values and sensitivity analysis for the various alternatives,
including undertaking a risk analysis;

8. Identification of intangible (i.e., non-quantifiable) benefits for secondary

justification of the project; and,

9. Determining the distribution of benefits.

69/111
 El Wak-Rhamu Road Economic Feasibility Study Report

6.2 Vehicle Operating Characteristics

The basic vehicle fleet characteristics as provided in the calibrated and configured
workspace for Kenya and, updated using field surveys are as provided in Tables 6-1 and
6-2 below.

70/111
 Design Review of El wak – Rhamu (A13) Road
El Wak-Rhamu Road Economic Feasibility Study Report

Table 6-1: Basic Vehicle Fleet Characteristics (MT)

Tyre Work
No. Tyre Annual Private Oper.
No. of Retread Annual Avg Pass- Related Life
Name Base Type PCSE of Tyre Type Base Work Use ESALF Weight
Wheels Cost Km Life engers Trips Model
Axles Recaps Hours (%) (t)
(%) (%)
Articulated Trucks Articulated Truck 2.20 22 6 Radial ply 0.60 12.00 75,000 2,000 10 0 0.0 0.00 6.38 42.30 Optimal
Heavy Truck Heavy Truck 1.80 10 3 Radial ply 0.60 12.00 75,000 2,000 10 0 0.0 0.00 3.73 24.60 Optimal
Medium Truck Medium Truck 1.50 6 2 Radial ply 0.60 12.00 75,000 2,000 10 0 0.0 0.00 2.05 10.50 Optimal
Light Truck Light Truck 1.40 6 2 Radial ply 0.60 8.00 55,000 1,400 10 0 0.0 50.00 0.18 6.53 Optimal
Large Bus Medium Bus 1.60 6 2 Radial ply 0.60 12.00 100,000 2,200 8 0 47.1 50.00 4.35 10.80 Optimal
Small Bus Light Bus 1.40 6 2 Radial ply 1.30 8.00 75,000 1,750 10 0 14.3 50.00 0.14 6.48 Optimal
Mini-bus (Matatu) Mini Bus 1.20 4 2 Radial ply 1.30 8.00 85,000 1,850 6 0 12.3 50.00 0.14 6.48 Optimal
Pick-up Utility Light Delivery 1.00 4 2 Radial ply 0.60 8.00 45,000 1,000 8 50 6.4 50.00 0.03 2.47 Optimal
4 Wheel Drive Four Wheel Drive 1.00 4 2 Radial ply 1.30 8.00 25,000 425 10 50 6.9 50.00 0.01 2.20 Optimal
Car Medium Car 1.00 4 2 Radial ply 0.60 8.00 20,000 370 10 95 4.3 50.00 0.00 1.50 Constant
Motorcycles Motorcycle 0.50 2 2 Radial ply 1.30 8.00 10,000 2,000 5 50 2.2 50.00 0.00 0.20 Optimal
Source: KRB (2018). Calibrated Kenyan HDM-4 Workspace

Table 6-2: Basic Vehicle Fleet Characteristics (NMT)

Wheel
Name Base Type No. of Wheels Wheel Diameter (m) Op. Weight (kg) Payload (kg) Avg Life Work Hours Annual Km Passengers
Type
Pedestrians Pedestrian 0 0.00 80 15 0 0 0 1.00
Cyclists Bicycle Pneumatic 2 0.70 100 35 10 150 2,500 1.00
Carts Animal Cart Pneumatic 2 1.00 500 300 3 600 3,000 0.00
Source: KRB (2018). Calibrated Kenyan HDM-4 Workspace

71/111
 Design Review of El wak – Rhamu (A13) Road
El Wak-Rhamu Road Economic Feasibility Study Report

6.3 Vehicle Operating Cost Inputs

Conversion of Financial Costs to Economic Costs

A Standard Conversion Factor (SCF) has been used to convert financial costs into
economic costs for carrying out economic analysis. This was necessary so as to exclude
transfer of payments within the economy and correct for distortions between
international and domestic prices caused by application of duties and taxes on traded
items.

The following were considered in computing the economic costs;

i. All taxes, duties and subsidies are excluded
ii. Imports and exports more highly priced where the exchange rate is
overvalued/there is a shortage of foreign exchange
iii. The opportunity cost of labour is used in case of under employment

The SCF formula for converting financial costs into economic costs is as summarized
below: -

(a) [Border price value of all imports plus border price value of all exports]
(a) SCF =
(b) [(Value of all imports plus all taxes on imports) + (Value of all exports minus all taxes on exports)]

SCF = (M + X)/ (M + T m i – S m) + (X – T x i + S x)

whereby: -
M = Value of Total Imports
X = Value of Total Exports
T m1 = Import Duty
T m2 = Sales Tax on Imports (e.g., VAT)
Sm = Import Subsidies
T x1 = Export Duties
T x2 = Sales Tax on Exports (e.g., VAT)
Sx = Export Subsidies

72/111
 Design Review of El wak – Rhamu (A13) Road
El Wak-Rhamu Road Economic Feasibility Study Report

The S.C.F was computed using average data for the years between 2014 and 2018 as
shown in the Table 6-3 below.

Table 6-3: Computation of S.C.F

2015 2016 2017 2018 2019* Average

1 Total Imports - CIF (M) 1,581,273 1,438,806 1,736,472 1,764,472 1,806,335 1,665,472
2 Total Domestic Exports – FOB (X) 503,023 510,042 534,393 542,857 520,787 522,220
3 Export Subsidies (Sx) - - - - - -
Taxes on International Trade
4 121,881 131,830 138,476 153,187 142,374 137,550
Transactions (Tm1)
VAT on Imported Goods & Services
5 128,897 144,800 150,599 182,586 171,907 155,758
(Tm2)

a X+M 2,084,296 1,948,848 2,270,865 2,307,329 2,327,122 2,187,692

b M+Tm1+Tm2 1,832,051 1,715,436 2,025,547 2,100,245 2,120,616 1,958,779
c X-Sx 503,023 510,042 534,393 542,857 520,787 522,220
d (M+Tm1+Tm2) +(X-Sx) 2,335,074 2,225,478 2,559,940 2,643,102 2,641,403 2,480,999
e SCF = (X+M)/ (M+Tm1+Tm2) +(X-Sx) 0.89 0.88 0.89 0.87 0.88 0.88
Source of Data: Economic Survey 2020, KNBS. * Provisional
Notes:
Amounts are in KSh Millions
CIF: Cost, Insurance and Freight
FOB: Free on Board

The financial costs have been converted into economic costs by applying a S.C.F of 0.88.

Value of Travel Time (VOT)

One of the primary drivers for road transport investments is often to have savings in
passenger working and non-working time. The resulting reduced time taken to travel is
often referred to as journey time savings and constitutes a major project benefit.

Since the savings in travel time can be easily quantified, the main task in appraisals,
therefore, always involves establishing the VOT. VOT basically represents the opportunity
cost of time and involves establishing an exchange rate between time (in hours) and
money (KShs).

73/111
 Design Review of El wak – Rhamu (A13) Road
El Wak-Rhamu Road Economic Feasibility Study Report

The social equity approach has been adopted in estimating the VOT in line with the
recommendations postulated in the World Bank OT-51 paper: -

i. A single national value of time should be used if poverty alleviation and

regional redistribution of income are national objectives.
ii. Working time should be valued at an augmented rate to account for extra
costs associated with employment of labour such as social security, taxes,
administration costs etc.
iii. Where unemployment rates are high, a shadow wage rate (SWR) that is lower
than the actual wage rate may be justified.
iv. Business travel time should be treated in the same way as other working time
savings.
v. A common value of time should be used for all non-work journeys, with a
default value of 30% of the average hourly income being used for the
valuation of non-work time.
vi. The value of time should be treated as increasing over time, proportional to
expected increases in per capita GDP.

Due to the absence of stated preference or revealed preference data, VOT has been
estimated using the wage-based approach. This approach requires determining the
median monthly wages and no. of working hours.

For the estimation of median wages, the following 2018 percent distribution of the
monthly salary ranges has been used.

Table 6-4: Percent Distribution of the 2018 Monthly Salaries

Monthly Salary Range (KShs) No. of per Group Frequency
0 - 9,999 23,188 1%
10,000 - 14,999 23,465 1%
15,000 - 19,999 91,673 3%
20,000 - 24,999 183,333 7%
25,000 - 29,999 329,746 12%
30,000 - 49,999 1,093,073 40%
50,000 - 99,999 888,162 32%
100,000 + 132,519 5%
Total 2,765,159 100%
Source: KNBS- Statistical Abstract 2019

1
K. Gwilliam (1997). World Bank paper OT-5: The Value of Time in Economic Evaluation of Transport Projects, Lessons from
Recent Research.
74/111
 Design Review of El wak – Rhamu (A13) Road
El Wak-Rhamu Road Economic Feasibility Study Report

The median worker's wage in Kenya was about KShs. 43,000 per month based on the
above data.

For determination of hourly wages, the assumptions tabulated below have been adopted
in computing the working hours.

Table 6-5: Computation of Working Hours

Item Number
1.. Annual Gross No. of Working Days
a. Total Weeks Per Year 52
b. Average No. of Working Days Per Week 5
c. Gross Total No. of Working Days Per Year 260
2.. Annual Leave & Public Holidays
a. Total Leave Days Per Year 21
b. Total Sick Leave Days Per Year 7
c. Total Public Holidays Per Year 10
d. Total Annual Leave & Public Holiday Days 38
3.. Net Total No. of Working Days Per Year (1.c - 2. d) 222
4..
a. Average No. of Working Hours Per Day 8
b. Average Total No. of Working Hours Per Year (3 * 4.a) 1,776
Source: Consultant’s Estimates
Employment overhead cost is estimated as 15% of the wage, rather lower than the
European figure given above by Gwilliam (World Bank, OT-5) since a large proportion of
workers in Kenya are self-employed.

Based on the foregoing, the estimated VOTs are as tabulated below.

Table 6-6: Calculation of Working and Non-Working VOT

Item Value
Average wage (KShs per year) 516,000
Working hours per year 1,776
Average wage (KShs per hour) 290.5
Employment overhead (%) 15%
Working VOT (KShs per hour) 334.1
Non-working VOT (KShs per hour) 100.2
Note: No corrections for shadow wage rate factors applied
Source: Consultant’s Estimates

An average of about KShs. 334.1 per hour and KShs. 100.2 per hour for Working and
Non-working VOT respectively. The average cost of cargo delay in KShs per hour has
estimated to be around 1.5 to 2.0 times the passenger working travel time cost translating
to about KShs. 584.7 per hour.
75/111
 Design Review of El wak – Rhamu (A13) Road
El Wak-Rhamu Road Economic Feasibility Study Report

The economic vehicle fleet characteristics as provided in the calibrated and configured
workspace for Kenya and, updated using field surveys are as provided in Tables 6-7 and
6-8 below.

76/111
 Design Review of El wak – Rhamu (A13) Road
El Wak-Rhamu Road Economic Feasibility Study Report

Table 6-7: Vehicle Fleet Cost Characteristics for MT (in KShs)

Crew Passenger
Fuel Lubricating Maintenance Annual Passenger Cargo
New Replace Wages Annual Work
Name Base Type (per Oil Labour Interest Non-Work Holding
Vehicle Tyre (per Overhead Time
litre) (per litre) (per hr) (%) (per hr) (per hr)
hr) (per hr)
Articulated Trucks Articulated Truck 10,700,000 56,330 56.0 221.6 420.0 413.0 1,708,000 18.0 0.0 0.00 584.7
Heavy Truck Heavy Truck 9,900,000 56,330 56.0 221.6 420.0 325.0 1,240,448 18.0 0.0 0.00 584.7
Medium Truck Medium Truck 4,950,000 43,000 56.0 221.6 420.0 155.0 1,240,448 18.0 0.0 0.00 584.7
Light Truck Light Truck 3,000,000 12,797 56.0 221.6 420.0 100.0 1,112,224 18.0 0.0 0.00 584.7
Large Bus Medium Bus 11,736,000 56,330 56.0 221.6 420.0 150.0 2,701,000 18.0 334.1 100.2 0.0
Small Bus Light Bus 4,821,000 37,133 56.0 221.6 420.0 100.0 1,205,000 18.0 334.1 100.2 0.0
Mini-bus (Matatu) Mini Bus 5,150,000 35,000 56.0 221.6 420.0 0.0 1,762,187 18.0 334.1 100.2 0.0
Pick-up Utility Light Delivery 4,066,714 16,057 49.8 204.4 420.0 0.0 1,089,666 18.0 334.1 100.2 0.0
4 Wheel Drive Four Wheel Drive 5,600,000 12,797 49.8 204.4 420.0 0.0 2,560,123 18.0 334.1 100.2 0.0
Car Medium Car 1,871,667 7,894 49.8 204.4 420.0 0.0 757,507 18.0 334.1 100.2 0.0
Motorcycles Motorcycle 119,350 3,000 49.8 204.4 420.0 0.0 85,500 18.0 334.1 100.2 0.0
Source: KRB - Calibrated HDM-4 Workspace

Table 6-8: Vehicle Fleet Cost Characteristics for NMT (in KShs)
Name Base Type Purchase Cost Crew Wages (per hr) Passenger Time (per hr) Cargo Holding (per hr) Annual Interest (%)
Pedestrians Pedestrian 0 0.00 60.80 91.1 0.00
Cyclists Bicycle 6,000 25.00 60.80 91.1 18.00
Carts Animal Cart 15,000 25.00 0.00 91.1 18.00

77/111
 El Wak-Rhamu Road Economic Feasibility Study Report

6.4 Road Accidents Analysis

HDM-4 allows users to describe the expected accident rates for different road and traffic
conditions such as road type and geometry, traffic flow pattern and other conditions.

The three accident severity types are:

i. Fatal – If death occurs within a fixed period (e.g., 30 days) following the accident;
ii. Injury – No fatalities occur, only injuries; and,
iii. Damage Only – Only damage to property occurs but no personal injuries.

Accident rates in the HDM-4 model are usually expressed based on the concept of
exposure. Exposure rate is calculated in terms of 100 million veh-km using the equations
shown here.

EXPOSINT = AADT x 365 / 106

whereby: -
AADT = Annual Average Daily Traffic
EXPOSINT = Exposure

The accident rate per 100 million veh-km is then established as the number of accidents
per year divided by the exposure.

ACCRATE = ACCYR / EXPOSURE

whereby: -
ACCRATE = Accident Rate per 100 million veh-km
ACCYR = Number of Accidents Per Year
EXPOSURE = Exposure Rate

It is generally agreed that the nature and incidence of accident rates can change with road
improvements. For instance, constructing a dual carriageway with faster speeds, may
mean that less accidents will occur but may, however, increase the severity of the
accidents.

In Kenya, there are no explicit studies examining the impact of changes in the accident
rates whenever a road improvement is undertaken making it extremely difficult to
forecast how any given road improvement will impact the accident rates.

The various components to accident costs include amongst others: -

i. Loss of earnings of individuals directly involved in accidents;
ii. Opportunity cost to a displaced member of society;
iii. Welfare costs associated with family bereavement (grief);
78/111
 El Wak-Rhamu Road Economic Feasibility Study Report

iv. Welfare loss of dependents' reduced life chances;

v. Damage to property;
vi. Costs of health services and emergency services involved; and,
vii. Traffic disruption.

Like in most countries across the globe, there are no agreed national guidelines to costing
accidents in Kenya due to the little consensus in assigning “value to the human life”.

Due to its complexity and uncertainty, accident savings has been excluded from this
economic analysis due to lack of data and consensus regarding the models, dependent
variables, costing and even analysis methods to adopt.

A road safety audit is proposed to be undertaken during the design process to enhance
the safety of the project.

79/111
 El Wak-Rhamu Road Economic Feasibility Study Report

7 Economic Analysis

7.1 Cost-Benefit Analysis (CBA)

Economic Cost Benefit Analysis involves calculating the likely costs and benefits of a
project and using the results to make recommendations regarding the viability of an
investment decision. It helps to answer a range of pertinent investment decisions such as:
-
1. Is the project viable? (i.e., benefits must be greater than costs).
2. Which is the best optimal alternative from the set of project alternatives?
3. When is the optimal year for construction and opening of the project?
4. How should the mutually exclusive projects be prioritized/ranked in case funds
are limited?
5. Should the project be implemented in stages?
6. What is the best work and maintenance standard to be adopted?

The purpose of road investment appraisal is to select projects with high economic returns
i.e., determine how much to invest and what economic returns to expect. The size of the
investment is determined by the costs of construction and annual road maintenance. The
economic returns are mainly in the form of savings in road user costs due to the provision
of a better road facility. These three costs constitute what is commonly referred to as the
total (road) transport cost or the whole life cycle cost.

The primary benefits of road rehabilitation and upgrading projects derive from:
1. Savings in maintenance expenditures;
2. Savings in vehicle operating costs;
3. Reduction in travel time to passengers and goods;
4. Reductions in the number and severity of accidents;
5. Salvage value of the road structure at the end of the analysis period;
6. Reduction in negative environmental effects; and,
7. Increase in value of goods moved

The secondary benefits include:

1. Induced economic development, such as agricultural or tourist activities that were
previously constrained by poor access; and,
2. Social benefits arising from the increased mobility of the population and improved
accessibility to health, education and other services.

80/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Economic analysis, as this, has been designed to give maximum coverage of costs and
benefits. However, it is important to avoid double counting, that is, do not add primary
and secondary benefits (e.g., increases in land values added to changes in transport
costs). Secondary benefits are usually ignored. The consumer surplus approach should be
adequate for carrying out economic analysis.

7.2 Estimation of Benefits

The HDM-4 Analytical Tool

The Highway Development and Management (HDM-4) model has been used for
estimation of benefits. HDM-4 is a software used to appraise both technical and
economic aspects of road investment projects. It’s the most commonly used software for
appraisal of road investment projects due to 1) an internationally accepted analysis
framework; 2) transparency in its analysis; and 3) ability to be calibrated to local
conditions. It has therefore been used for this economic analysis.

The approach used for the economic analysis is the cost-benefit analysis of “with” or
“without project” case. The economic analysis is based on homogenous road sections, in
terms of physical characteristics, traffic and road condition.

The HDM-4 analytical framework is based on the concept of pavement life cycle analysis,
which is typically 15 to 40 years. This is applied to predict road deterioration, road works
effects, road user effects and socio-economic and environmental effects, Odoki and Kerali
(2000).

To ensure accurate prediction of pavement performance and vehicle resource

consumption, the configured and calibrated HDM-4 workspace for Kenya has been
adopted in this analysis

The main data sets required as inputs for HDM-4 analyses are categorized as follows:
1. Road Network Data: include inventory, geometry, pavement type, pavement
strength, road condition.
2. Traffic Data: include details of traffic composition, volumes and growth rates,
speed-flow types and traffic flow pattern.
3. Vehicle Fleet Data: include vehicle physical characteristics, tyres, utilization,
loading and performance.
4. Road Works Data: include a range of construction and maintenance work items
together with their unit costs.
5. Economic Analysis components and parameters: include discount rate, analysis
period, salvage value, standard conversion factors etc.

81/111
 El Wak-Rhamu Road Economic Feasibility Study Report

The sources of data used in this study included the following: field surveys carried out by
the Consultant, KeNHA, Kenya Roads Board (KRB), previous studies conducted in the
study area, internet literature review and HDM-4 parameter default values. The Economic
Appraisal Guidelines for Road and Transport Projects prepared by the Ministry of Transport
and Infrastructure have also been adopted.

Economic Analysis Parameters

Discount Rate
Discount rate refers to the opportunity cost of capital in the public sector. It is
recommended to use the planning discount rate and not the financial market rate in
conducting economic analysis.

The planning discount rate used in the calculation of the NPV was taken as 12%, in line
with the recommendations of the Road Sector Investment Project II (2018 – 2022). The
World Bank also recommends the 12%2 discount rate since most research have shown
that the cost of capital for developing countries is higher than 10%.

Annual Cost Stream

The project cost has been phased over a 3-year construction period taking cognisance of
the prepared work programmes. It’s been assumed that 30% shall be invested in the first
year, 30% in the second year and the remaining 40% in the terminal year of the project.

The Salvage Value

Whenever an asset’s life lasts longer than the analysis period, its residual value (i.e., value
of the remaining life) at the last year of analysis should always be discounted and then
included as a project benefit.

Amongst the various project elements, bituminous components have been assumed to
have a life of about 20-years or less depending on periodic treatment with a zero-salvage
value. The formation layers below the bituminous layer on the other hand has been
assumed to have a 30-year life since they are most often recoverable, while the structural
elements have been assumed to have a life of more than 50-years. Other residual values
incorporated includes the cost of land acquisition, social displacement cost etc.

Tables 7-1 to 7-3 below shows the computation of the salvage value. A salvage value of
about 20% of capital cost of construction has been adopted for this economic analysis

2
The World Bank (1998), Handbook on Economic Analysis of Investment Operations. Washington DC: The World Bank.
82/111
 El Wak-Rhamu Road Economic Feasibility Study Report

based on estimates from the straight-line depreciation method. The method involves
deducting the residual value of an asset form the original cost and dividing the balance
equally by the number of years of estimated life and is widely used in project appraisals
by the Asian Development Bank.

83/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Table 7-1: Salvage Value (Option 1)

Depreciation 20-year 20-year
Bill Amount, A Salvage
Description rate per Depreciated Salvage Value, Remarks
No. (KShs) Value %
annum, D Value, D20 S
Land acquisition cost, community
1 Preliminary and General Items 2,938,021,300 130,000,000 4%
boreholes/pans
4 Site Clearance and Top Soil Stripping 353,000,000 0
5 Earthworks 3,546,051,000 118,201,700 1,182,017,000 2,364,034,000 67%
Includes gabions, stone pitching,
7 Excavation and Filling for Structures 303,495,500 10,116,517 101,165,167 202,330,333 67%
etc. with shorter lifespans
Mostly pipe culverts whose lifespan
8 Culverts and Drainage Works 352,469,100 0 0%
is about 20-years
9 Passage of Traffic 124,693,700 0
12 Natural Materials for Sub-Base and Base 425,250,000 14,175,000 141,750,000 283,500,000 67%
14 Cement and Lime Treated Materials 1,824,100,000 0 0%
Bituminous Surface Treatment and
15 768,715,000 0
Surface Dressing
16 Bituminous Mixes 2,744,283,000 0
Includes cost of reinforcement,
17 Concrete Works 705,645,500 14,112,910 423,387,300 282,258,200 40%
concrete and formworks
20 Road Furniture 322,122,920 0
21 Miscellaneous Bridge Works 58,412,000 0
22 Dayworks 674,032,160 0
25A ESH & Safety Activities 24,000,000 0
25B HIV/AIDS Awareness Campaigns 12,000,000 0
26 Road Safety Awareness Campaigns 12,000,000 0
27 Fibre Optic Installations 198,735,300 0
Total 15,387,026,480 3,262,122,533 21%
Note: Formulars
(A – 0) (A – D) S*100
D = D20 = S = (A – D20) V =
Asset Life Span 20 A

84/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Table 7-2: Salvage Value (Option 2)

Depreciatio 20-year 20-year
Bill Amount, A Salvage
Description n rate per Depreciated Salvage Value, Remarks
No. (KShs) Value %
annum, D Value, D20 S
Land acquisition cost, community
1 Preliminary and General Items
2,938,021,300 130,000,000 4% boreholes/pans
4 Site Clearance and Top Soil Stripping 353,000,000 0
5 Earthworks 3,546,051,000 118,201,700 1,182,017,000 2,364,034,000 67%
Includes gabions, stone pitching,
7 Excavation and Filling for Structures
303,495,500 10,116,517 101,165,167 202,330,333 67% etc. with shorter lifespans
Mostly pipe culverts whose lifespan
8 Culverts and Drainage Works
352,469,100 0 0% is about 20-years
9 Passage of Traffic 124,693,700 0
12 Natural Materials for Sub-Base and Base 521,325,000 17,377,500 173,775,000 347,550,000 67%
14 Cement and Lime Treated Materials 2,263,400,000 0 0%
Bituminous Surface Treatment and
15
Surface Dressing 1,484,435,000 0
16 Bituminous Mixes 0 0
Includes cost of reinforcement,
17 Concrete Works
705,645,500 14,112,910 423,387,300 282,258,200 40% concrete and formworks
20 Road Furniture 322,122,920 0
21 Miscellaneous Bridge Works 8,466,000 0
22 Dayworks 674,032,160 0
25A ESH & Safety Activities 24,000,000 0
25B HIV/AIDS Awareness Campaigns 12,000,000 0
26 Road Safety Awareness Campaigns 12,000,000 0
27 Fibre Optic Installations 198,735,300 0
Total 13,843,892,480 3,326,172,533 24%
Note: Formulars
(A – 0) (A – D) S*100
D = D20 = S = (A – D20) V =
Asset Life Span 20 A

85/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Table 7-3: Salvage Value (Option 3)

Depreciatio 20-year 20-year
Bill Amount, A Salvage
Description n rate per Depreciated Salvage Value, Remarks
No. (KShs) Value %
annum, D Value, D20 S
Land acquisition cost, community
1 Preliminary and General Items
2,938,021,300 130,000,000 4% boreholes/pans
4 Site Clearance and Top Soil Stripping 353,000,000 0
5 Earthworks 3,546,051,000 118,201,700 1,182,017,000 2,364,034,000 67%
Includes gabions,stone pitching, etc.
7 Excavation and Filling for Structures
303,495,500 10,116,517 101,165,167 202,330,333 67% with shorter lifespans
Mostly pipe culverts whose lifespan
8 Culverts and Drainage Works
352,469,100 0 0% is about 20-years
9 Passage of Traffic 124,693,700 0
12 Natural Materials for Sub-Base and Base 521,325,000 17,377,500 173,775,000 347,550,000 67%
14 Cement and Lime Treated Materials 2,263,400,000 0 0%
Bituminous Surface Treatment and
15
Surface Dressing 768,715,000 0
16 Bituminous Mixes 2,084,994,500 0
Includes cost of reinforcement,
17 Concrete Works
705,645,500 14,112,910 423,387,300 282,258,200 40% concrete and formworks
20 Road Furniture 322,122,920 0
21 Miscellaneous Bridge Works 58,412,000 0
22 Dayworks 674,032,160 0
25A ESH & Safety Activities 24,000,000 0
25B HIV/AIDS Awareness Campaigns 12,000,000 0
26 Road Safety Awareness Campaigns 12,000,000 0
27 Fibre Optic Installations 198,735,300 0
Total 15,263,112,980 3,326,172,533 22%
Note: Formulars
(A – 0) (A – D) S*100
D = D20 = S = (A – D20) V =
Asset Life Span 20 A

86/111
 El Wak-Rhamu Road Economic Feasibility Study Report

7.3 Analysis Scenarios

Two alternatives have been considered in this analysis, viz.

i. The “without project” – Maintaining the existing road with the aim of preserving
the existing asset using the present practice; and,
ii. The “with project” – Improving the road to a higher design class e.g., stronger
pavement, improved drainage, widened cross-section etc.

The road work standards for each project alternative are as tabulated below.

Table 7-4: Project Alternatives

“Without Project” Activities “With Project” Activities

Paved Sections Unpaved Sections Paved/Unpaved Sections

• Edge repair every year • Light grading every year • Upgrading the road to a
• Patching potholes ≥ 5 • Spot re-gravelling when stronger pavement with
no. potholes/km gravel widened shoulders and
• Drainage works every thickness≤100mm improved drainage.
year • Routine Miscellaneous
• Routine Miscellaneous works every year
works every year • Drainage works every
• 50mm overlay after at year
least 7 years and 4≤IRI≤9
Source: Kenya Roads Board (2018). Calibrated HDM-4 Workspace for Kenya

The trigger mechanisms for the work standards are those adopted in the calibrated HDM-
4 workspace for Kenya.

87/111
 El Wak-Rhamu Road Economic Feasibility Study Report

7.4 Multi-Criteria Analysis (MCA)

Traditionally, appraisal has often been based on the concept of the cost-benefit analysis
(CBA) with little or no consideration to other impacts including social concerns, political
concerns, safety concerns, environmental impacts, energy concerns and comfort amongst
others. This has often been attributed to the difficulty in quantification, valuation and
forecasting of these other impacts in monetary terms using the current techniques and
tools.

Unlike the traditional CBA method, MCA allows for the integration of both quantitative
and qualitative costs and benefits, and monetised and non-monetised costs and benefits
in a single analytical framework.

MCA analysis is based on the Analytic Hierarchy Process (AHP) method which allows for
the conversion of subjective assessments of relative importance to a set of overall scores
or weights.

The procedure3 for inclusion of these other impacts often involves: -1) the definition of a
decision criteria; 2) identification of the costs and benefits; 3) estimation of the relative
weightings of the costs and benefits; 4) calculation of individual attributes and combined
scores of alternatives; and, 5) investment decision making based on the rank/score
outcomes.

To determine the relevant criterion and the perceived weightings, it’s often essential to
conduct stakeholder surveys which involves comparing impacts (i.e. benefit/cost) against
one another and using the findings to derive the corresponding relative weights. The
benefits/costs weightings are then incorporated into the HDM-4 to assist in making
investment decisions.

For this study, MCA field surveys were not conducted as this was not part of the scope of
works. Furthermore, the economic costs and benefits have been captured in their totality
in estimating economic indicators.

3
Jennaro B. Odoki, Farhad Ahmed, Gary Taylor & Sunday A. Okello (April 2008). Towards the Mainstreaming of an
Approach to Include Social Benefits within Road Appraisal: A Case Study from Uganda. The World Bank Group
88/111
 El Wak-Rhamu Road Economic Feasibility Study Report

7.5 Road Deterioration Trends

The predicted average road condition trends for the “without” project and “with” project
is as shown below.

Figure 7-1: Road Deterioration Trends

Source: HDM-4 Runs

These condition trends represent the engineering performance of the project over the
entire life cycle and are premised on the assumption that the defined maintenance
standards shall be adhered to.

The average initial roughness is above 3.3 IRI m/km. After upgrading the road sections
and following strictly the specified maintenance activities and intervention criteria, the
average annual roughness over the analysis period doesn’t exceed around 4 IRI other
than for pavement option 2. Option 2 (which involves surface treatment), deteriorates
relatively faster in comparison to Options 1 and 3.

89/111
 El Wak-Rhamu Road Economic Feasibility Study Report

7.6 Project Benefits

The main benefits include savings in vehicle operating costs (VOCs) and travel time costs
(TTCs) for both motorized and non-motorized transport. The discounted and
undiscounted savings in VOCs and TTCs are as tabulated below and detailed in Appendix
1.

Table 7-5: Project Net Benefits (KShs Millions)

Discounted Savings Undiscounted Savings

Options
Savings VOC Savings TTC Savings VOC Savings TTC

Option 1 2,723.92 4,045.11 12,463.09 788.13

Option 2 2,552.92 3,907.52 11,410.82 768.48
Option 3 2,585.71 3,934.80 11,698.12 771.09
Source: HDM-4 Runs

Option 1 has the highest savings in VOCs and TTCs. Option 1 was selected for
implementation. Option 1 was selected on account of offering positive returns and the:

• Need to harmonize designs and pavement structures within the entire Horn of
Africa Gateway Development Project (HoAGDP).
• Prevailing hot weather within the project area hence the choice of super-pave
asphalt concrete surfacing as opposed to surface dressing in a bid to minimize
chances of softening and rutting.

7.7 Economic Indicators

Net Present Value (NPV) Criterion

This refers to the present value of the net benefits of a project. For a project to be
economically justifiable, the NPV must be positive when discounted at an appropriate
rate. Usually, the larger the NPV the better the project and that it can be used to choose
between mutually exclusive projects.

NPV is computed using the expression below: -

NPV = (B1 - C1)/ (1 + r) + (B2 - C2)/ (1 + r) 2 + … + (Bn- Cn)/ (1 + r) n

Whereby: -
B1, B2…. Bn = Benefits in years 1, 2 …. n

90/111
 El Wak-Rhamu Road Economic Feasibility Study Report

C1, C2…. Cn = Costs in years 1, 2 …. n

r = Planning discount rate
n = Planning time horizon

Economic Internal Rate of Return (EIRR) Criterion

This is the discount rate that results into an NPV of zero for a given project. For a project
to be economically justifiable, the EIRR must be equal or greater than the planning
discount rate. Usually, the higher the EIRR the better the project but it cannot be used to
decide between mutually exclusive projects.

EIRR is computed using the expression below: -

0 = (B1 - C1)/ (1 + r) + (B2 - C2)/ (1 + r) 2 + … + (Bn- Cn)/ (1 + r) n

Whereby: -
B1, B2…. Bn = Benefits in years 1, 2 …. n
C1, C2…. Cn = Costs in years 1, 2 …. n
r = EIRR
n = Planning time horizon

Benefit-Cost Ratio (BCR) Criterion

The BCR is the ratio of discounted benefits divided by discounted costs. A positive BCR
signifies a viable project. The ratio gives an indication of the profitability of investment
option relative to base option at a given discount rate. It helps eliminate the bias of NPV
towards larger project options but, like the IRR, gives no indication of the size of the costs
or benefits involved.

The BCR of investment option m, relative to base option n, is calculated as follows:

NPV(m-n)
BCR (m-n) = +1
Cm

Whereby: -
BCR(m-n) = Benefit cost ratio of investment option m relative to base option n
NPV(m-n) = Discounted total net benefit of investment option m relative to base
option n. This is the NPV at discount rate r
Cm = Discounted total road agency costs (RAC) of implementing
investment option m

91/111
 El Wak-Rhamu Road Economic Feasibility Study Report

First Year Rate of Return (FYRR)

FYRR is used as an indicator of the optimal project timing. It is computed using the
expression below: -

FYRR (%) = (B1 - C1) / Ci

Whereby: -
B1 and C1 = Benefits and Costs in year 1 after construction
Ci = Road investment costs

Normally if a computed FYRR is greater than the planning discount rate, then the project
should have commenced earlier, if equal to the planning discount rate, then the project
is timely and should go ahead, but if less than the discount rate, then the start of the
project should be deferred. It may also call into consideration the adoption of a lower-
cost upgrading method.

Economic Indicator Outputs

The Table 7-6 below summarizes the economic indicators of the economic analysis at
12% discount rate.

Table 7-6: Economic Indicators at 12% Discount Rate

Indicator Option 1 Option 2 Option 3

NPV (KSh. Millions) 9,951.10 2,638.20 1,546.90
EIRR (%) 19 18 16.9

BCR 1.8 1.7 1.5

FYRR (%) 15.6 15.1 14.8
Source: HDM-4 Runs

The results show that strengthening of the pavement, improving the drainage and
widening of the cross-section is viable as proposed at base case.

7.8 Sensitivity Tests

Sensitivity analysis involves identifying and quantifying the variables that greatly
influence a project’s net benefits. Sensitivity analysis is normally carried out by increasing
or decreasing cost and benefit variables in order to measure their impact on the project’s
IRR and NPV results. It serves to indicate the robustness of the project in the event of
changes in key parameters.

92/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Sensitivity analysis to evaluate the impact of changes in key factors to the project’s
viability was undertaken.

The scenarios considered were:

i. A 20% increase in costs;
ii. A 20% decrease in benefits; and,
iii. A combination of a 20% increase in costs and a 20% decrease in benefits.

The Table 7-7 below summarises the sensitivity analysis results for the various project
roads.
Table 7-7: Sensitivity Analysis Findings

Option 1 Option 2 Option 3

Scenario IRR IRR IRR
NPV NPV NPV
(%) (%) (%)
Increase in Costs 7,233 16.6 -169 11.9 -1,485 11.1
Decrease in Benefits 5,243 16 -696 11.5 -1,794 10.8
Increase in Costs + Decrease in
2,525 13.7 -3,503 9.6 -4826 9
Benefits
Source: HDM-4 Runs
For the scenarios analysed, the viability of the project is more threatened by a decrease
in benefits than changes in costs. This may be attributed to the low baseline traffic.

7.9 Switching Values

The switch value of a cost or benefit is that value at which the project’s NPV becomes
zero (or the IRR equals the opportunity discount rate). It’s usually expressed in terms of
the percentage change in say the cost, AADT or traffic growth rates needed for the
project’s viability to be threatened. Switching values gives an indication of the variables
that will affect the project outcomes the most.

The Table 7-8 below summarises the switch values for the project road.

Table 7-8: Switch Value Analysis Findings

Parameter Option 1 Option 2 Option 3

Increase in Capital & Recurrent Costs (%) 38% 36% 35%

Decrease in Benefits (%) -71% -69% -67%

Source: HDM-4 Runs
It would take a 38% increase in cost or 71% decrease in benefits for the viability of Option
1 to be threatened.

93/111
 El Wak-Rhamu Road Economic Feasibility Study Report

8 Intangible Benefits

Intangible benefits have more often been excluded from appraisal studies due to the
difficulty in not only quantifying these impacts but also in valuing them in monetary terms
using the current techniques and tools. More often than not such benefits are just but
stated to help further justify the appraisal process.

Amongst the anticipated additional benefits likely to be realized upon the improvement
of the project road are as summarized below.

Growth of the Local Economy

This is expected to be derived from amongst others local purchases of construction
materials including sand, gravel, hardstones etc. Better access shall also boast earnings
from tourism within the northern tourism circuit which covers amongst others the
Malkamari National Park. Farming along River Daua is also likely to benefit from increased
market access and improved access to farm inputs.

Creation of Employment Opportunities

Creation of employment opportunities for the local populace during the construction
period for both semi-skilled and unskilled labour (e.g., messengers, secretaries, drivers,
cleaners, watchmen, labourers etc.). This is projected to inject billions of shillings into the
local economy and in the process improve the living standards. During the construction
period, there shall also be training and technology transfer to local communities.

Improved Security
This likely to be due to better access and response by the police whenever conflicts flare
up. Improved security may further reduce the cost of doing business by eliminating the
need for police escorts and even allowing for night trips as was again witnessed along
the adjacent Isiolo-Moyale road.

Increase in Value of Land

Improved access is expected to result into an increase in the value of land within the
vicinity of the project road. This was the case in Marsabit town after upgrading of the
Isiolo – Moyale road where there was tenfold4 increase in value of land.

4
H.P. Gauff Consulting Engineers (Sept. 2016). Supervision of Construction of Merille River–Marsabit Road (A2). Socio-
Economic Report Impact of Upgrading. Report No. 3. Page 15.
94/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Reduced Cost of Living

This is likely to be deduced from the reduced cost of transportation of goods and services
for essential commodities including fresh produce.

Improved Access to Social Services and Amenities

These include hospitals, schools, government services, extension services etc., leading to
improved living standards.

95/111
 El Wak-Rhamu Road Economic Feasibility Study Report

9 Monitoring & Evaluation Framework

A result-based monitoring and evaluation framework has been prepared for the corridor
and is presented in Table 9-1 below. It outlines the project’s goal, objectives, activities,
outputs, outcomes, impacts, beneficiaries, indicators and targets.

96/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Table 9-1: M&E Results Framework

Results Chain Verifiable Indicators Means of Verification Risks and Assumptions

To boost the economic status of the • % Increase in transport sector • Kenya National • Political stability in
people of Kenya as a whole and the contribution to GCP Bureau of statistics Kenya and Somalia
people of Mandera County through • % Increase in transport sector Annual Economic • Steady economic
facilitation of a faster, safer and contribution to GDP outlook report growth
more economic link to the Somalia • % increase in Volume of goods traded • County Integrated •
Border, Wajir, Garissa and Isiolo by between Kenya and Somalia Development
Goal

June 2027 • Total cost of goods traded between Report

Kenya and Somalia • Land surveys
• No. of New commercial enterprise along
the road section
• % increase in employment opportunities
• % increase in land prices
Objective 1.1 • % Reduction in travel time between • National & County • Completion of the new
Elwak and Rhamu towns statistics Report highway will lead to
To improve access and transit of • % reduction in Vehicle Operating Costs • Time Savings Survey increase traffic growth
food crops and Livestock to markets • % reduction in Cost of public transport • Traffic Count Survey • Inflation rate remains
by 50% in Isiolo, Merille, Mandera fares • Survey of drivers stable as well as the
and Garissa towns by June 2027 • % increase in traffic volumes of freight, and travellers. exchange rate
passengers and goods • Household Surveys
Outcomes

• % increase in livestock faming • Market Surveys

• % increase in food crop production • O-D Surveys
• % increase in business productivity
• % increase in Household income
Objective 1.2 • % Reduction in travel time between • Travel Survey • Road users will prefer
Elwak, Rhamu, Mandera, Isiolo, Wajir, • O- D surveys to use the project road
To improve access and transit of Garissa towns • Education over any other
people to social amenities in major • Average cost of trips made by women institutions survey alternative route
towns by 20% in Mandera, Isiolo, and men, by mode of transport used

97/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Results Chain Verifiable Indicators Means of Verification Risks and Assumptions

Merille, Marsabit, Wajir, Gairissa, • % Increase in use of public transport • Key Informant • Distance to social
Nanyuki, by 2027 • Change in maternal mortality rate Interviews amenities will be
• Change in neonatal and under-five • Demographic and reduced with
mortality rates Health Surveys, completion of the road
• Reduction of distance to the nearest Health Centres section
health facility or referral facility • Survey of drivers •
• % increase of School attendance rate in and travellers.
Primary and Secondary • O-D Surveys
• Number of pupils enrolled in primary • Household Surveys
education
• Number of pupils enrolled in secondary
education
• % increase in enrolment of boys and girls
in schools
• Average time taken to schools
Objective 1.3 • % reduction in police response time • County Statistical • The completion of the
• % Reduction in travel time between abstract road will increase the
To improve security in the project Elwak, Rhamu, Mandera, Isiolo, Wajir, • Police crime frequency of patrols by
region through provision of a faster Garissa towns statistics police and Armed
and efficient transport corridor • % reduction in rate of banditry along the • Police crime incident police along the road
road section reports section
• The completion of the
road will lead to
increase police
presence along the
road section
Objective 1.4 • % increase in average Household Income • County Statistical • Completion of the
• % increase in new businesses and trading abstract project will lead to
centres emerging within the project road

98/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Results Chain Verifiable Indicators Means of Verification Risks and Assumptions

To improved economic and social • % increase in household expenditures • KNBS Economic increase in disposable
welfare of people living along the • % increase in business productivity survey incomes
road corridor • % increase in the employment • Market Survey
opportunities along the corridor • Household Survey
• Project employment
data
Output 1 • No of Kms completed • Quarterly Progress • Sustained budgetary
• Road roughness index reports allocations are
Upgrading of the Elwak - Rhamu • % increase in traffic volumes along the • Project Completion available.
Road Section to Bituminous road section Report • Land will be available to
Standards by June 2025 • Ratio of actual to budgeted construction KeNHA for road
• Annual Project
cost expansion
Reports
1. Road length – 139 • No. of accidents • Weather conditions will
• No. of fatalities & minor injuries • Monthly Project be favorable
km
Progress Reports
2. Road width – 6
• M&E Reports
meters
• Preconstruction and
Outputs

post construction
audit reports
Output 2 • % Increase in employment index in • County • Project will engage
Mandera county development local youths in the
Number of casuals from Mandera • No. of Men employed reports construction works
County employed in the project by • No. of Women employed • Kenya National • labour is readily
June 2025 • No. of PWDs employed Bureau of statistics available
• % increase of women employed in • Household income • Sustained budgetary
construction projects & expenditure allocations are available
reports and surveys
Output 3 • Number of people sensitized in HIV/AIDS • Monthly Project • Sustained budgetary
Progress Reports allocations are available

99/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Results Chain Verifiable Indicators Means of Verification Risks and Assumptions

Completed HIV/AIDs prevention • % change in attitude of construction • M&E Reports • HIV/AID prevention
intervention by June 2025 workers towards HIV/AIDs • HIV/AIDs progress intervention will be
• No. of HIV/AIDs campaigns undertaken reports successful to enhance
• No. of Condoms distributed to Road behaviour change
construction workers and the community
Output 4 • No. of Accidents along the road section • Household Surveys • Sustained budgetary
• % increase in new businesses and trading • Market Surveys allocations are available
Provision of roadside social centres emerging within the project road • Community will use the
• Road Safety Audit
amenities e.g. market stalls, Truck • % increase in household expenditures markets to sell produce
reports
and Bus Parks and ablution blocks • % increase in business productivity and livestock
• Month Progress • The construction of
by June 2025
reports Truck and bus parks will
• O-D destination lead to reduction in
Surveys accidents caused by
fatigue
Output 5 • No. of weighbridges installed • Monthly Project •
• Progress Reports
Provision of weighbridge Along the • M&E Reports
road by June 2025

Output 6 • % allocated to good and services • Quarterly and • Local supplies will be
produced locally Monthly Progress purchased for use in
Kes. 7,453,304,633.20 allocated to reports the project
goods and services produced locally • Quarterly and • Local Materials will be
by June 2027 Annual Performance purchased for use in
Contract reports the project
• Local subcontractors
and consultants will be
engaged in the project

100/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Results Chain Verifiable Indicators Means of Verification Risks and Assumptions

Output 7 • No. of Graduate professionals engaged in • Quarterly progress • Graduate students will
the project reports be engaged in the
15 No. Graduate Professionals • No. of Graduate Engineers registered • M&E reports project
mentored at the project in Civil with experience from the project. • Adequate budget to
Engineering, Survey and other engage Graduate
professions by June 2027 professionals in the
project
Project Components Inputs and Activities Resources Required: • Timely signing and
closure of the financing
i. Road Civil Works 1. Feasibility & Activity agreements
ii. Advisory and Detailed • Timely payments for
complementary Engineering Design 1. Preliminaries & General Items invoices.
services: study 2. Site Clearance and Topsoil • Timely provision of
Construction 2. Negotiation with Stripping counterpart funds
supervision services; Potential Financiers 3. Earthworks
Baseline survey and, of Project 4. Excavation and Filling of
Environmental and 3. Procurement of Structures
Social monitoring Consultancy of 5. Culverts and Drainage works
and evaluation; Design Review 6. Passage of Traffic
HIV/AIDS, gender, 4. Procurement of 7. Natural Material for Subbase
road safety Consultancy for & Base
sensitization and supervision of Civil 8. Cement & Lime Treatment
awareness and, Works 9. Bituminous Surface
Project technical 5. Procurement of Treatment & Surface
audit Contractor to carry Dressing
iii. Capacity Building out Civil Work 10. Concrete Works
and Institutional 6. Consultancy
Support: capacity Services
building of KeNHA 7. Civil Works

101/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Results Chain Verifiable Indicators Means of Verification Risks and Assumptions

staff in project
management and
Monitoring &
Evaluation
iv. Compensation and
Resettlement:
Provision for the
adequate
compensation and
resettlement of
Project Affected
Persons identified in
the Project ESIA
report, and
relocation of affected
utilities.

102/111
 El Wak-Rhamu Road Economic Feasibility Study Report

10 Conclusion and Recommendations

10.1 Conclusion

At 12% discount rate, we have a positive NPV, an EIRR which is greater than the planning
discount rate and BCR which is greater than one. This shows that all the project options
are viable. However, option 1 returns the highest NPV and is recommended for
implementation.

The results from the sensitivity analysis showed that the viability of the preferred project
Option 1 is the most robust as it would take a 38% increase in cost or 71% decrease in
traffic growth rates for its viability to be threatened for the project be unviable.

Switch values, on the other hand, have revealed that it would either take a 38%, 36% and
35% increase in costs or a 71%, 69% and 67% decrease in benefits for the viability of the
project options 1, 2 and 3 to be threatened respectively. This shows that the project is
robust given the high percentages by which the benefits need to decline or the costs
need to increase for the project’s viability to be threatened.

10.2 Recommendations
The project is expected to have enormous economic and social benefits if implemented.
All the identified negative social and environmental impacts are manageable, and suitable
mitigation measures have been proposed. It is justifiable to conclude that the proposed
road project is viable and should be implemented as proposed using pavement Option
1.

The decision to adopt pavement Option 1 as opposed to the other two options has been
informed by the following reasons:

(i.) Need to harmonize designs and pavement structures within the entire Horn of
Africa Gateway Development Project (HoAGDP) in line with KeNHA’s
recommendations.

(ii.) The prevailing hot weather within the project area informed the decision to
choose super-pave asphalt concrete surfacing as opposed to surface dressing in
a bid to minimize chances of softening and rutting. Moreover, asphalt concrete
surfacing is better suited for the adopted traffic design class of T2 along such an
international trunk road as opposed to surface dressing.
103/111
 El Wak-Rhamu Road Economic Feasibility Study Report

References

1. KRB (2016). Customized HDM-4 Workspace Report. (Final Report)

2. Kenya Roads Board (2017). Multi Criteria Analysis for Preparation of 2nd Phase of Road Sector
Investment Programme (2018-2022). Final Report.
3. Ministry of Transport (2010). Integrated National Transport Policy. Republic of Kenya.
4. County Government of Mandera. Second CIDP 2018-2022
5. KNBS. Gross County Product Report 2019
6. The National Treasury and Planning (2018). Kenya Vision 2030 – Third Medium Term Plan (MTP)
2018 – 2022: Transforming Lives: Advancing socio-economic development through the “Big
Four”. Republic of Kenya.
7. The World Bank (1998). Handbook on Economic Analysis of Investment Operations. Washington
DC: The World Bank.
8. KNBS. Economic Survey 2020
9. KNBS. (2018). Kenya Integrated Household Budget Survey Report.
10. KNBS. Statistical Abstract 2019
11. Jennaro B. Odoki, Farhad Ahmed, Gary Taylor & Sunday A. Okello (2008). Towards the
Mainstreaming of an Approach to Include Social Benefits within Road Appraisal: A Case Study
from Uganda. The World Bank Group.
12. Kerali, Henry (2003). Economic Appraisal of Road Projects in Countries with Developing and
Transition Economies. Transport Reviews - TRANSP REV. 23. 249-262.
10.1080/0144164032000068920
13. KRB (2019). State of Our Roads 2018: Summary Report on Road Inventory and Condition
Survey and Policy Implications
14. Mipakani Project (2020). Available from: http://mipakani.net/image/lapsset-
corridor#.YEqCgLYYDIU

104/111
 El Wak-Rhamu Road Economic Feasibility Study Report

Appendices

Appendix 1 – Economic Indicators

105/111
 El Wak-Rhamu Road Economic Feasibility Study Report

106/111
 El Wak-Rhamu Road Economic Feasibility Study Report

107/111
 El Wak-Rhamu Road Economic Feasibility Study Report

108/111
 El Wak-Rhamu Road Economic Feasibility Study Report

109/111
 El Wak-Rhamu Road Economic Feasibility Study Report

110/111
 El Wak-Rhamu Road Economic Feasibility Study Report

111/111