Budget shortfall risks stalling road projects

Wednesday March 18 2020

The government’s ambitious road construction and maintenance programme is likely to be slowed down over a Sh66 billion budget shortfall.

Documents seen by the Nation show that the Treasury will need to disburse the funds to the State Department of Infrastructure before June to help sustain the Sh163 billion road plan scheduled to run until the financial year ends.

According to the documents, a total of Sh65 billion was allocated to cater for the development and rehabilitation of national highways, urban and rural roads for the fiscal year ending in June.

The allocation is far much lower than the Sh94.8 billion required to complete the proposed road works, including land compensation. Data from the Ministry of Roads and Infrastructure show that department is chocking in pending bills totalling Sh36.8 billion.

The Kenya National Highways Authority is facing the biggest funding gap of Sh40.9 billion having received a paltry Sh8.9 billion as of December 31, 2018 against Sh49.7 billion projected for all certified works for 2018/19. Land compensation along national highways is expected to require Sh22.1 billion.

The documents suggest that the Kenya Rural Roads Authority (KeRRA), which was allocated Sh37.7 billion, could be facing risk of higher penalties on delayed payments to contractors.


“KeRRA is severely underfunded that it raises possibility of claims in form of interest on delayed payments,” read a summary report from the ministry.

The authority requires 33.5 billion to clear all certified works but has so far managed to pay contractors Sh15.6 billion. The projects under KeRRA comprise of mainly low-volume sealed roads under the 10,000 roads programme.

The State Department of Infrastructure was hit hard last year in budget cuts that reduced its spending by Sh9 billion. The decision was reached when the national government decided to cut the country’s development budget by 5.1 per cent from Sh677.2 billion to Sh642.8 billion.

Part of the huge saving of Sh34.3 billion was to be used to fund President Uhuru Kenyatta's legacy projects and crank up the war on corruption. Last year, the department spent billions in emergency repair works on key roads in the country that were rendered impassable due to heavy rains.