Infrastructure projects delay leads to significant cost escalation

Written By: Nicholas Nduati
1609

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Delays in completion of key infrastructure projects such as roads and power is leading to significant cost escalation.

According to Deloitte 48 percent of infrastructure projects end up being over budgeted while 87 percent are overrun by time mainly due to delays in procurement, among other factors.

Kenya has in the recent past been heavily reliant on debts to implement her infrastructure projects, which have elicited a lot of public debate, that the country may be overburdened by debts it cannot repay.

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With 90 percent of the projects run by the government, the just released report by Deloitte indicating that approximately 48 percent of projects are over-budgeted and 87 percent of them are overrun by time leading to cost escalations only adds to the fears that the country’s debt could get out of hand.

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Some of the projects that have been overrun by time is the construction of the Lake Turkana Power Line to evacuate the already available 318 MW, meaning that Kenyans could be paying for power that is not getting to them.

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According to Deloitte, it will be difficult for the country to achieve maximum economic benefits from the Standard Gauge Railway unless the country gets at least 40 percent of all freight services on the railway.

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As much as involvement of the government in infrastructure projects is needed, there is a need to bring in the more effective private sector through Public Private Partnerships as well as an improvement of the current procurement procedures.

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