State in talks to stop 437 Uhuru, Kibaki projects
What you need to know:
- The projects are accumulating pending bills, increasing in variation costs and could expose Kenya to legal compensation claims by the contractors if cancelled.
- The Treasury told the IMF that it had concluded a stocktaking of projects and associated commitments as part of the reforms under the multibillion shilling deal with the fund.
- The government, however, did not disclose whether the contractors were demanding compensation to quit the stalled projects.
The Government is negotiating with contractors to allow it cancel 437 stalled projects, started during the Mwai Kibaki and Uhuru Kenyatta regimes, setting the stage for compensation claims by suppliers.
The International Monetary Fund (IMF) has revealed the government is negotiating contractual terms with the suppliers of the projects and hopes to cancel them by March next year as Kenya seeks to contain expenditure in the wake of a cash crunch due to the Covid-19 pandemic.
The government was forced to review all State projects following revelations that hundreds of development projects worth Sh9 trillion had stalled.
The projects are accumulating pending bills, increasing in variation costs and could expose Kenya to legal compensation claims by the contractors if cancelled.
The Treasury told the IMF that it had concluded a stocktaking of projects and associated commitments as part of the reforms under the multibillion shilling deal with the fund and identified projects to be cancelled.
The government, however, did not disclose whether the contractors were demanding compensation to quit the stalled projects.
“Based on this extended exercise, we have identified 437 stalled or underperforming projects that should be cancelled. The stalled projects have not received budget funding for several years but have nevertheless remained in the portfolio of projects,” Treasury told the IMF.
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