Time and Cost Overruns in Power Projects in Kenya:ACase Study of Kenya Electricity Generating Company Limited

Abstract

Time and cost overruns in infrastructure development projects during
implementation continue to pose great challenges to developing
countries. Research has found that many factors impede the successful
completion of projects on time, within budget and of good quality. This
study sought to investigate the factors that significantly contributed to
time and cost overruns in power projects implemented by KenGen, to
evaluate their relative ranking and to quantify their impacts. The study
was based on a questionnaire survey conducted with persons drawn
from contractors, consultants and KenGen, who are involved in the
implementation of one or more of the four projects in the study. Analysis
of 33 significant variables from the survey revealed eight underlying
factors contributing to overruns, namely, contractors’ inability, improper
project preparation, resource planning, interpretation of requirements,
definition of the work involved, timeliness, government bureaucracy
and risk allocation. As regards ranking, government bureaucracy
topped the list while risk allocation was shown to have been the least
significant. There was also a perception that these factors would recur
in KenGen’s future projects in a similar implementation environment.
By closely relating the factors to the variables, it was observed that
they resulted in overruns in the projects by varying magnitudes. The
projects had time overruns ranging from –4.6% to 53.4 %, while the cost overruns varied between 9.4% and 29%. These revelations should
enable planners to take stock of past performance and incorporate
the lessons learnt in future project planning and implementation.
Because the variables and underlying factors are likely to recur in
future projects, their occurrence needs to be anticipated and
appropriate strategies and mechanisms designed in order to overcome
or minimize their potential impact. Recommendations are given to assist
the Government of Kenya (GoK) and KenGen on how project
management could be improved when future projects are planned and
implemented. The findings of this paper can be used as a reference by
project owners, managers and agencies in developing their own project
management strategies.

Keywords: KenGen; project management; overruns; variables; factors; project
implementation