The Cabinet has approved a new Comprehensive Framework for Infrastructure Projects Pricing aimed at tackling inflated project costs, improving transparency, and ensuring better value for money in public investments.
The framework is designed to eliminate the irregular and inconsistent pricing practices that have long plagued government-funded infrastructure projects.
It introduces a data-driven system to determine project costs, promoting accountability and prudent use of public resources.
Oversight of the reform will be led by the Chief of Staff and Head of the Public Service, working through a Multi-Agency Technical Working Team that has already made key strides.
Among the milestones achieved so far are the development of sector-specific pricing models, a cost derivation methodology, and proposals for a National Infrastructure Pricing Database (NIPD) to centralize and standardize cost data.
Cabinet noted that, despite Kenya’s heavy investments in infrastructure over the past two decades, projects have continued to suffer from cost variability, overruns, and inconsistencies—issues largely blamed on outdated, precedent-based pricing methods and limited market intelligence.
To address these gaps, the new framework will adopt the First Principles Approach (FPA), a globally recognized costing method used in countries such as the United Kingdom, Australia, and Singapore.
The FPA replaces precedent-based estimates with detailed, data-backed cost analysis and is expected to cut project cost overruns by as much as 25 percent.
According to the Cabinet, the move marks a major step toward strengthening fiscal discipline and ensuring that every shilling spent on public infrastructure delivers maximum value to taxpayers.
