Lawmakers have pressed Energy Principal Secretary Alex Wachira to explain why the budget for the National System Control Centre (NSCC) electricity grid project has surged from EUR 46.6 million to EUR 82.5 million.
Members of the National Assembly Public Debt and Privatization Committee on Thursday described the nearly 100 per cent increase as alarming and demanded a clear justification.
Committee Chairperson Abdi Shurie said the figures presented by the PS were unconvincing. “There is a very large variation between the initial amount and the current one.
Adding EUR 35.9 million to the initial amount is almost equivalent to 100 per cent increase and whatever you have submitted does not justify this and we need a solid reason for it,” Shurie told Wachira.
Wachira defended the revised budget, saying the project, which has already broken ground, will deliver value for money upon completion.
He said the additional financing from the French Government Treasury was necessary after a significant price gap emerged between the Bid Negotiation (RETNET) budget of EUR 46.6 million and the actual cost of EUR 82.5 million.
According to Wachira, the difference was caused by several factors, including inflation, which rose to 29 per cent between 2019 and 2023, and the effects of the Covid-19 pandemic. He said the pandemic destabilized global macroeconomics and created a level of risk that attracted hedging costs.
The PS also cited changes to the project timeline, noting that the completion period had been reduced to 36 months to meet sector requirements. This was shorter than the best-case estimate of 42 months and the median estimate of 48 months.
Wachira told the committee that further revisions were made after a review of the original plan, including doubling the floor area, introducing waste water management systems, improving physical security, adding infection safety and sanitary requirements, and upgrading internal finishing paint standards.
He said these adjustments also contributed to the higher cost.
The committee directed Wachira and his team to submit detailed documentation to justify the budget increase before a final decision is made.
