The Cabinet has approved a Comprehensive Framework for Infrastructure Projects Pricing, a landmark policy aimed at curbing inflated project costs, enhancing transparency, and ensuring better value for money in public investments.
The framework seeks to eliminate the irregular, inconsistent, and costly practices that have long characterised the pricing of government infrastructure projects.
It introduces a data-driven approach to determining project costs, promoting accountability and prudent use of public resources.
According to a Cabinet dispatch, the reform will be spearheaded by the Chief of Staff and Head of the Public Service through a Multi-Agency Technical Working Team.
“The team has already achieved key milestones, including the development of sectoral pricing models, cost derivation criteria, and proposals for establishing a National Infrastructure Pricing Database (NIPD),” the dispatch reads in part.
The Cabinet, chaired by President William Ruto, noted that despite Kenya’s substantial investment in infrastructure over the past two decades, the country continues to face cost variability, project overruns, and pricing inconsistencies.
These challenges have largely been attributed to reliance on precedent-based cost estimates, limited market intelligence, and the absence of a standardised pricing regime.
Under the new framework, Kenya will adopt the First Principles Approach (FPA), a model successfully used in countries such as the United Kingdom, Australia, and Singapore.
The FPA replaces precedent-based costing with data-driven analysis, assessing every cost component from the ground up. According to the Cabinet, this approach could potentially reduce cost overruns by up to 25 per cent.
The National Infrastructure Pricing Database will serve as a central repository of data on materials, labour, equipment, and other project cost parameters.
It will be regularly updated to reflect market dynamics, enabling government agencies to prepare realistic cost estimates and curb price manipulation or inflation.
The dispatch further noted that the new system will strengthen the integrity of public procurement and ensure that taxpayer funds are directed toward quality, timely, and efficiently executed projects.
By setting clear cost benchmarks, the framework is expected to deter corruption and mispricing, which have previously inflated project budgets.
Additionally, the framework aims to enhance investor confidence, streamline project financing negotiations, and promote competitive bidding among contractors.
It aligns with the government’s broader public finance reforms focused on improving fiscal discipline and maximising returns on infrastructure spending.
The approval of the framework forms part of the government’s ongoing measures to enhance efficiency and accountability.
In April 2025, the government officially launched the e-procurement system, with a full transition for all public entities, including national and county governments, set for July 1, 2025.
President Ruto has repeatedly affirmed that there will be no backtracking on the e-procurement initiative and has warned officials resisting the change to step aside.
He emphasised that the goal is to make all government transactions publicly accessible and subject to scrutiny, noting that up to 40 per cent of public funds have been lost through the former manual system.
