Construction players decry political uncertainty, pending bills

Players in the construction industry have decried political uncertainty, frequent tax policy changes and pending bills, which they say are pushing them out of business.

 Speaking during the 2025 Institute of Quantity Surveyors of Kenya Symposium on Thursday, the professionals said disruptions brought about by electoral cycles were negatively affecting the predictability and stability of the construction sector.

 “How the private sector is set up, it generally means you need long-term planning, which we are not seeing at the moment,” Institute of Engineers of Kenya president Eng Shammah Kiteme said.

 “You need to work on the budgeting, procurement and work plans. The Vision 2030 agenda was a good attempt. With the agendas of Big Four and Beta [Bottom-Up Economic Transformation Agenda], there is a need for continuity.”

 Kiteme said pending bills are forcing professionals out of business as work done is not paid for. The problem has also cascaded down to the counties and in many instances, change of regimes at the county level mean some contracts’ payment for work done is not a priority, even where the Certificate of Practical Completion is issued.

 “I think even the formation of pending bills verification committees is a strategy to frustrate payments,” Kiteme said.

 He added that proposals such as collapsing of the Kenya Urban Roads Authority and Kenya Rural Roads Authority need to consider that the institutions have binding contracts that need to be considered before radical changes are made.

 Further, he also raised issues with the financing of projects where long-term commitments are made for projects that can be financed in a shorter period.

 Nashon Okowa, a construction consultant, said political uncertainty brought about by elections was hindering business in the sector.

 “Two years to the election, some players are planning to flee as we don’t know how the elections will be,” he said.

 “Everyone knows this is the year to make money before we start shutting. We need to fix our politics. And hope is not a strategy.”

 Quantity Surveyor Dr Lawrence Mbugua said that while the housing agenda has been accrued forward by the last three administrations, its financing has changed, with the Kenya Kwanza Administration imposing a levy.

He said the absorption of the housing levy is slow, forcing the government to invest billions collected from the levy in Treasury bills and bonds.

 “Possibly, the government should have set the levy at a lower rate to be able to absorb and keep scaling,” Mbugua said.

 The government aims to build 200,000 houses per year but has fallen behind the target.

Lands CS Alice Wahome has announced plans to release 5,000 affordable housing units this month, and that 140,000 affordable houses have been constructed so far.

 Evans Kamau from IFC said the pending bills issue will soon become the next big problem as many contractors are owed by the national and county governments.

 “Pending bills are essentially government borrowing. If this money is released to those owed, I think it will do much more than some of the things we are trying to do,” he said.

 “Corruption is also contributing to these bills. We have instances where we have a pending bill because a certain deal was cut somewhere.”

 Kamau said pending bills have become the norm in almost all counties and the national government, which is worsened by regime changes.

 An unstable tax regime also emerged as a challenge as investors are not able to plan accordingly.

 They said tax changes through the Finance Bill disrupt project costs, causing some contractors to shut down.