Cabinet approves new framework to curb inflated infrastructure costs

The Cabinet on Tuesday approved a Comprehensive Framework for Infrastructure Projects Pricing, aiming to curb inflated project costs.

A dispatch from the State House said the framework also intends to improve transparency, and ensure value for money in public investments.

The new framework seeks to end the irregular and inconsistent practices that have long plagued government infrastructure projects.

"Instead of relying on outdated estimates, the policy will adopt a data-driven approach to determine the true cost of construction projects," it says.

The reform will be overseen by the Chief of Staff and Head of the Public Service through a Multi-Agency Technical Working Team.

It has already developed sector-specific pricing models, clear cost derivation criteria, and proposed a National Infrastructure Pricing Database (NIPD) to track project costs.

Cabinet noted that despite significant infrastructure investments over the past two decades, Kenya continues to face cost overruns and inconsistencies.

"This is largely due to reliance on precedent-based pricing and limited market intelligence," it stated.

The framework will apply the First Principles Approach, successfully used in countries such as the United Kingdom, Australia, and Singapore, which builds project costs from scratch using real-time data such as materials, labour, and site conditions.

Officials say this approach could reduce cost overruns by up to 25 per cent.

It is expected that the move will being accountability and efficiency, ensuring taxpayers get better value for money while boosting confidence in public spending.