The government is currently negotiating with contractors to cancel 437 projects initiated during the regimes of retired President Mwai Kibaki and incumbent, Uhuru Kenyatta.
This will set the stage for the government to begin compensation talks with suppliers.
According to the International Monetary Fund (IMF), Kenya has initiated talks with suppliers to cancel the projects and hopes to do so by March 2022, so as to reserve money due to the economic constraints brought about by the Covid-19 pandemic.
This is after it emerged that government projects worth Ksh9 trillion had stalled forcing the state to review all contracts.
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The projects continue to accrue bills, variation costs and could cost the government more in terms of legal compensation if cancelled.
The National Treasury reviewed all the stalled projects and wrote to the IMF informing the fund of multibillion projects it had settled on cancelling.
Some of those projects are funded by IMF.
The government, however, did not disclose whether the contractors were demanding compensation to quit the stalled projects.
“Based on this extended exercise, we have identified 437 stalled or underperforming projects that should be cancelled. The stalled projects have not received budget funding for several years but have nevertheless remained in the portfolio of projects,” Treasury told the IMF.
