A simmering dispute over the control of Sh10.5 billion from the Roads Maintenance Levy Fund (RMLF) has intensified the standoff between county governments and the National Assembly, after the Court of Appeal froze disbursement of the funds pending an appeal.

The appellate court, in a decision delivered by Justices Daniel Musinga, Pauline Nyamweya, and George Odunga, suspended the enforcement of a June 5 High Court ruling that had declared the exclusion of counties from the RMLF unconstitutional.

The stay will remain in effect for one year or until the appeal is heard and determined.

The judges warned that immediate execution of the High Court ruling could cause “chaos and disorder” in road management across the country, as it would render key legal provisions governing road classification and funding inoperative without alternatives in place.

“We are satisfied that the orders sought are merited,” the bench ruled. “Public interest tilts in favor of maintaining the current legal framework until the issues on appeal are resolved.”

The freeze affects an estimated Sh6.8 billion that counties were expecting to receive in the 2024/25 financial year.

So far, only Sh3.6 billion of the Sh10.5 billion allocation has been disbursed, leaving many counties uncertain about funding for critical road maintenance.

The High Court had earlier nullified Section 6 of the Kenya Roads Board Act, which allows the Kenya Roads Board to securitize 50 percent of the RMLF for road development, maintenance, and rehabilitation.

The section also outlines revenue sharing among major road agencies, KeNHA, KeRRA, KURA, and KWS.

In its application, the national government warned that suspending the legal provision without a replacement would cripple operations at national road agencies, jeopardizing infrastructure projects.

The Court of Appeal agreed, stating that removing the legal framework would hinder the agencies’ ability to cover operational costs and would lead to “considerable deterioration” of the road network.

The High Court had also invalidated Section 47 of the Kenya Roads Act, which defines the legal criteria for classifying roads as national, rural, or urban.

The appellate judges said removing this provision would create confusion between the two levels of government.

Without a clear classification framework, the court noted, both the national and county governments would likely clash over jurisdiction and maintenance responsibilities posing a threat to coordinated service delivery.

The ruling acknowledges that disputes over resource allocation between the two levels of government have persisted since the onset of devolution. County leaders have repeatedly accused the National Assembly of undermining devolution by controlling key funds and failing to support county mandates.

“This court is alive to the fact that allocation of resources between the national and county governments has long been a contentious issue,” the ruling reads. “County governments have accused the National Assembly of frustrating devolution through skewed budget allocations.”

In opposing the stay, the Council of Governors, through CEO Mary Mwiti, argued that counties had already been allocated Sh10.52 billion for the 2024/25 fiscal year following extensive intergovernmental consultation.

She told the court that the Summit, chaired by the President, and the Commission on Revenue Allocation had both endorsed the transfer.

The Senate had also factored the allocation into its budget.

With the appellate court granting the stay, counties will now have to wait until the appeal is heard to know whether the High Court decision will be upheld, leaving critical road maintenance projects in limbo