By Benadeta Mwaura - Reporter
Kenya, 22 December 2025 - The Kenyan government is intensifying pressure on contractors to deliver stalled infrastructure projects after years of backlogs and pending payments that have hindered economic progress, strained cash flow in the construction sector and shaken investor confidence.
Senior officials have made it clear that underperformance will no longer be tolerated, even as the State moves to settle long‑standing debts owed to contractors and suppliers, a move aimed at restoring momentum on public works that are critical to Kenya’s growth strategy.
Deputy Chief of Staff for Performance and Delivery Management Eliud Owalo has been vocal about the need for improved performance and accountability from firms contracted to deliver public infrastructure projects.
“We should not be pushing contractors to meet their deadlines. They should strive to be ahead of schedule,” Owalo said, urging contractors to improve compliance with agreed timelines.
“We are witnessing a worrying trend where some contractors are biting off more than they can chew. They aggressively pursue numerous tenders, quote unrealistically low prices to win bids, and ultimately struggle to deliver,” he added, highlighting capacity constraints on multiple fronts.
Owalo also warned that political interference in procurement and contract execution would not be tolerated.
“If you are a politician, stick to politics. You cannot have your cake and eat it,” he said, stressing that officials who shield underperforming contractors risk strict sanctions.
“We will blacklist and debar contractors who fail to deliver and ensure they do not participate in future government tenders.”
The government’s renewed push for delivery comes alongside efforts to address one of the construction sector’s deepest frustrations: unpaid bills that have stalled projects for years.
Officials have acknowledged that the massive build‑up of debts to contractors, which ballooned into the hundreds of billions of shillings, crippled liquidity and left many firms unable to complete ongoing contracts.
According to the Controller of Budget report, accumulated pending bills reached over KSh 524 billion by mid‑2025, significantly affecting small and medium enterprises and development activity.
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In December 2025, the Cabinet confirmed that it had cleared all pending bills for certified roads works and accrued interest up to 31 December 2024, paying out KSh 123 billion and enabling the immediate resumption of 875 previously stalled contracts across the country.
The road sector has also benefitted from innovative financing, including securitisation of part of the Road Maintenance Levy Fund to raise funds for payments, and upfront loans via special purpose vehicles to accelerate debt settlement.
These interventions have helped unlock cash flow, bring contractors back to work, and revive stalled infrastructure.
Principal Secretary Prof Fatuma Chege confirmed that the Government has also moved to streamline payments for key programmes such as the Competency Based Curriculum (CBC) classroom construction, with invoices cleared directly to contractors whose work has been certified, signalling a more performance-oriented approach to public works execution.
Parliamentary reports show that after the March 2025 initial disbursement of 40 % of outstanding amounts, a significant number of firms resumed work, and further releases are contingent on verified progress in the field. Government engineers are tasked with confirming work done before additional payments are processed, a sign of stricter performance monitoring.
This “performance for payment” model reflects a shift from the past, where contractors were often left waiting months or years for backlog payments, slowing or halting vital infrastructure delivery.
With new funds now flowing, authorities expect heightened accountability and return.
Nevertheless, officials argue that the performance‑first approach and financial interventions are critical to realising the government’s development agenda, strengthening trust in public procurement, and ensuring that infrastructure spending translates directly into tangible economic returns.
As 2026 unfolds, the balance between payment discipline and delivery expectations will be key. The government’s focus on results, backed by financial commitments to clear old debts, signals a pivot toward outcome-driven public works.
Whether this approach can sustainably right Kenya’s longstanding challenges in project execution will depend on continued reform of procurement systems, robust monitoring and a collaborative private sector response.
