Why Kenyan Construction Projects Overrun Their Budgets

Cost overruns get blamed on weather, material price spikes, or a difficult contractor. Those things happen, but in our experience reviewing project accounts after the fact, the larger overruns are almost always traceable to decisions made before construction started, at tender stage, when nobody was yet incentivised to slow down and check the numbers.

Tenders are often issued against drawings that are 80% complete, with the remaining 20% described as 'to be confirmed' or covered by a provisional sum. That's a reasonable way to keep a programme moving, but it only works if someone is actively tracking which provisional sums have been converted to firm costs, and at what variance from the original allowance. Left unmanaged, a project can be 60% complete before anyone realises the cumulative provisional sum variance has eaten the contingency.

Every variation has a cost, but more importantly, every variation has a cost of disruption: remobilising a trade that has already moved on, reordering material that's already been procured, resequencing work that depended on the original design. Clients frequently underestimate the disruption cost because it doesn't appear as a separate line item; it's absorbed into the contractor's claim for the variation itself, often inflated well beyond the direct material and labour cost.

Independent cost monitoring, someone whose job is solely to track committed cost against budget, separate from the people executing the work, catches drift early enough to act on it. By the time an overrun shows up in a final account, the only options left are to pay it or fight it. Monthly cost reporting during construction turns that into a conversation you can have at month three instead of a dispute you have at month eighteen.