The government has taken a decisive step to trim down the Ministry of Roads and Transport’s outstanding projects budget from Sh900 billion to Sh650 billion.
This move is aimed at not only facilitating the completion of ongoing projects but also settling pending bills.
During a session with members of the Departmental Committee on Transport and Infrastructure, Cabinet Secretary for Roads and Transport, Kipchumba Murkomen, outlined the ministry’s strategy.
It includes reducing the project portfolio even further by implementing a freeze on new projects. However, there will be an exception for projects that are deemed viable and require re-advertisement.
Additionally, the ministry has taken measures to terminate non-performing contracts. The ministry will also remove projects from the planning cycle if they have not yet been awarded.
To bolster the budget, the ministry is exploring opportunities for development partners to offer financial support. This initiative is especially crucial as the bulk of the outstanding portfolio is held by foreign companies.
A budget boost for these contracts would enable the government to release funds held for the benefit of local contractors.
Furthermore, the ministry is actively pursuing the Private-Public Partnership (PPP) model for viable projects.
CS Murkomen presented these strategic actions during his appearance before the committee to discuss Supplementary Estimates No.1 for the Financial Year 2023/24.
He highlighted that the government had been compelled to introduce a supplementary budget merely two months into the new financial year due to emerging priorities.
Some of these priorities include Housing Development Levy employer contributions and Junior Secondary School start-up expenses.
In response to these priorities, the government has had to make sacrifices in several areas. The cuts now include a significant reduction in the allocation for the State Department for Roads. The supplementary budget allocates Sh230.1 billion, down from the printed budget of Sh250.8 billion, representing a decrease of Sh20.750 billion.
Similarly, the State Department for Transport’s approved budget for FY 2023/24 was initially Sh60.4 billion. This comprised of Sh14.1 billion for recurrent expenditure and Sh46.2 billion for development expenditure.
However, the revised budget now stands at Sh58.1 billion. The new budget includes Sh14.4 billion for current expenditure and Sh43.7 billion for capital expenditure. This reflects a net change of Sh2.3 billion.
CS Murkomen concluded by appealing to the committee to support any further measures undertaken by the ministry that benefit contracted capital works.