• The new system follows in the wake of a new International Monetary Fund (IMF) report revealing that Kenya would need Sh1 trillion to finalise stalled projects.
• Regulations on public investments require that all project ideas are subjected to same quality assurance process, hence will be appraised before funding.
President Uhuru Kenyatta’s administration has moved to contain ghost projects following the installation of a management system to monitor state ventures.
Starting next financial year, all government projects will have to be logged to the Public Investment Management System (PIMIS) for planning and execution.
National Treasury CS Ukur Yatani, in the draft 2020 Budget Policy Statement, says the use of PIMIS will be mandatory for budget preparation, execution, monitoring and reporting public investment projects.
Regulations on public investments require that all project ideas are subjected to the same quality assurance process, hence will be appraised before funding.
The government is also banking on PIMIS to avert project delays, some of which have resulted in increased costs amid extended contract periods.
So troublesome it has been to a point President Uhuru Kenyatta named Interior Cabinet Secretary Fred Matiang’i to steer the implementation of government projects.
To Deputy President William Ruto’s ire, the President restated his preference to the inter-ministerial committee during his Jamhuri Day speech.
The new system follows in the wake of a new International Monetary Fund (IMF) report revealing that Kenya would need Sh1 trillion to finalise stalled projects.
IMF, in the study concluded in August but released this week, argues that about 500 projects – nearly half of government ventures, have stalled.
The situation is blamed for the cash crunch in the country as the projects have tied up funds in them.
“The rapid increase in public investment since 2010 occurred without enough screening for project viability and readiness before budget,” the IMF report reads.
It says lack of controls has allowed many new projects to enter the budget pipeline hence posing a challenge in funding ongoing works.
A Treasury report released last February showed that the Transport and Infrastructure docket had a chunk of the stalled projects.
The JKIA’s Greenfield Terminal, civil works at various airports, stadiums, Kenya Academy of Sports, Crime Data Repository Unit, district headquarters, housing projects, and courts were among those cited.
Yatani says that with PIMIS, this will be a thing of the past as “projects that have received financing will be required to adhere to budget and timelines for delivering the expected outputs.”
“Monitoring and evaluation of projects will, therefore, be key in ensuring that service delivery is improved, value for money is realised, and lessons documented to improve future policy,” the BPS reads.
The system will be administered by the Public Investment Management (PIM) Unit – a new establishment at the National Treasury to improve project selection, budgeting and management.
The PIM unit, Treasury says, will ensure that priority projects are “selected and implemented on time, within budget and to required quality standards.”
“The PIM Unit shall independently review major projects before they are included in the budget. The PIM processes will be automated to ensure operational effectiveness,” the budget plan reads.
All multi-year agreements will be subjected to a fiscal space test and be approved by the Treasury CS before inclusion in the budget.
The Jubilee administration says the step follows that “achievement of the Big Four Plan is strongly anchored on prudent management of available public resources.”
“As such, the government will continue to strengthen expenditure control and improve the efficiency and effectiveness of public spending,” the Treasury said.
Treasury is also creating a manual on Economic Project Appraisal and Management to guide state officers on the management of public investments.
The Jubilee administration is also putting in place stringent conditions for funding proposed projects by ministries.
No money would be released for the ventures unless they are linked to the Big Four plan either as enablers or drivers.
Projects will also be funded on the basis of the degree to which a programme promotes job creation and addresses poverty reduction.
Other considerations would be the degree to which a programme is addressing the core mandate of ministries, departments, and agencies.