The Cabinet has approved a Comprehensive Framework for Infrastructure Projects Pricing, a move aimed at tackling inflated project costs, enhancing transparency, and improving value for money in public investments.
The new framework seeks to address longstanding challenges in the pricing of government infrastructure projects, which have been marred by irregular, inconsistent, and costly practices.
According to Cabinet documents, the initiative will establish a data-driven system for determining infrastructure costs, ensuring greater accountability and prudent use of public resources.
Oversight of the reform will be led by the Chief of Staff and Head of the Public Service through a Multi-Agency Technical Working Team.
The team has already recorded several key milestones, including the development of sector-specific pricing models, clear cost derivation criteria, and proposals for a National Infrastructure Pricing Database (NIPD).
“Despite significant infrastructure investments over the past two decades, the country continues to experience cost variability, project overruns, and inconsistencies,” Cabinet noted.
Officials attributed these challenges to the reliance on precedent-based estimates and limited market intelligence, which have undermined the efficiency of public spending.
The framework introduces the First Principles Approach (FPA), a methodology successfully applied in countries such as the United Kingdom, Australia, and Singapore.
Unlike traditional precedent-based costing, FPA relies on rigorous, data-driven analysis to determine project costs from the ground up.
Cabinet estimates that adopting this approach could reduce cost overruns by up to 25 per cent, translating into significant savings for taxpayers.
The pricing reform is also expected to foster greater transparency in public infrastructure investments.
By establishing standardised sectoral pricing models and a centralised database, government agencies, contractors, and other stakeholders will have access to consistent, reliable data, helping to eliminate arbitrary pricing and improve planning and budgeting.
Experts have welcomed the initiative, noting that high variability in project costs has long hampered Kenya’s infrastructure development.
“A robust pricing framework is long overdue,” said a senior economist involved in public sector projects.
“It will provide predictability, enhance accountability, and ensure that public funds are spent efficiently.”
Cabinet also emphasised that the reforms align with broader national objectives to modernise public financial management, improve service delivery, and attract responsible private sector participation in infrastructure development.
The successful implementation of the framework could mark a turning point in Kenya’s approach to infrastructure planning, ensuring that future projects are both cost-effective and sustainable.
