Time and cost overruns in power projects in Kenya: A case study of Kenya electricity generating Company limited

Abstract

Time and cost overruns on infrastructure development projects during implementation continue to pose great challenges to developing countries. Research has found that, there are many factors that impede on successful completion of projects on time, budget, and quality. This study sought to investigate on the factors that significantly contributed to time and cost overruns on power projects implemented by KenGen, evaluate their relative ranking, and to quantify their impacts. The study was based on a questionnaire survey among persons drawn from contractors, consultants and KenGen, involved in the implementation of one or more of the four projects in the study. The results together with the empirical data from the three completed projects were presented. Thirty-three variables were identified as significant in contributing to overruns. Factor analysis revealed eight underlying factors namely; contractor inabilities, improper project preparation, resource planning, interpretation of requirements, works definition, timeliness, government bureaucracy, and risk allocation as having been significant contributors to overruns. On ranking, government bureaucracy topped the list while risk allocation was shown to have been least significant. There was also a perception that these factors would recur on KenGen's future projects under similar implementation environment. The identifiable quantitative impacts of time and cost associated with the factors on the completed projects were presenfed together with overall time and cost overruns on the projects. The study led to conclusions that, there were identifiable variables and underlying factors that contributed to time and cost overruns during the implementation of the four power projects. These revelations should enable planners to take stock of past performance and incorporate lessons learned on future projects planning and implementation. The variables and underlying factors have potential of recurring in future projects. Therefore, there is need to anticipate their occurrence, and to continually design appropriate strategies and mechanisms to overcome or minimize their potential impacts. Government bureaucracy was seen to have been the lead factor in contributing to the overruns. There were time and cost overruns on all the four projects led by Olkaria II. Risk associated to these factors should continually be assessed through the various stages of the project life cycle, determined, and appropriate contingencies adopted