In his latest attempt to spur investment and get stalled projects moving, President Kenyatta in January 2015 commissioned the construction of the Outering Road. This adds to his array of commissioned projects. However, it has so far stalled since certain individuals claim part of the road.Late last year, Government Chief Quantity Surveyor Moses Nyakiongora said that most ongoing national government projects undertaken by the Ministry of Lands, Housing and Urban Development had stalled countrywide due to lack of funds.
He stated that if Sh11 billion is not provided in the supplementary budget, the developments would go to waste. The said projects included footbridges, government buildings, civil works and other public works.
It has been observed that there are a large number of projects that are held up due to ineffective handling. The factors that lead to this includes: policies of the county governments, lack of prioritization at the state level or inadequate follow up from the central government.
It’s no secret that there is a desire from the engineering sector to make infrastructure a key driver in the country’s economical development. With the construction of superhighways, building of new residential houses and the steps taken to cut Power shortages, the engineers’ dream to spur economic growth is slowly becoming a reality. To fully realize these ambitions, the current government must support these efforts and resurrect the numerous infrastructure projects that stalled or even aborted in the previous regime.
Another cause for the stall is the fact that most infrastructure developers with the technical capacity to execute large-scale projects are too indebted to take on new projects. With the fear of adding debts, the developers would rather wait to clear the loans taken for the previous projects before venturing into new ones.
We have contractors with the ability to service their debts, and we have banks that have lent too much to infrastructure and are having difficulties in recovering their money. Both issues need to be fixed if they are to regain the appetite to undertake the next phase of infrastructure development in the country.
Banks like the African Development Bank and World Bank have in previous occasions rolled out funds to spur infrastructural growth but the previous governments’ internal disagreements over the merits of rapid industrialization versus protecting the selfish interests of a few individuals lay waste many projects.
Tackling these issues will require action on multiple fronts. Developers should move with speed to capitalize on the renewed optimism about Kenya’s ability to raise funds. They may be able to recapitalize through private equity markets if investors remain optimistic that Uhuru Kenyatta’s government can avoid the problems that stalled infrastructure development in the past.
Kenyatta’s administration, in spite of limited room for fiscal maneuvering is trying to grease the wheels of infrastructure with its own direct spending, especially on roads. It is estimated that the infrastructure sector will be allocated $24.2M in the 2015-2016 financial year and the amount increased with time.