‘Idle time’ is an amount of money paid for the period a contractor’s employees or machines remain unproductive due to factors that can either be controlled or uncontrolled by the contracting party.
Kenya paid a Chinese contractor Sh214.8 million as ‘idle time’ in the financial year to June 30, 2024, following late disbursement of funds for an irrigation project in lower Nzoia area, which straddles Siaya and Busia counties.
‘Idle time’ is an amount of money paid for the period a contractor’s employees or machines remain unproductive due to factors that can either be controlled or uncontrolled by the contracting party.
Auditor-General Nancy Gathungu said the government paid Sino Hydro Company Limited, the firm implementing the irrigation project, Sh214.8 million for idle time and Sh70 million interest on late payments even as it blamed delayed funding by the World Bank.
“Examination of payment vouchers provided for audit for Lot 1, Lower Nzoia Irrigation Project for the financial year 2023/2024 revealed that the project had paid a total accumulated amount of Sh214,801,258 as claims made by the contractor for idle time,” she said.
The delay in paying the Chinese firm, the audit notes, was due to late release of funds from the government and inadequate budget by the World Bank.
“In the circumstances, the government has gone at a loss of Sh70,072,392 through payment of interest to the contractor resulting to increase in project costs and the value for money may not be realised,” Ms Gathungu said.
"The Lower Nzoia irrigation project was initiated in June 2018 and is expected to benefit 12,600 farmers through irrigation and drainage services across 10,000 acres of land on the left bank of River Nzoia.
Delays
The project was initially planned to conclude in June 2021, but delays have seen its deadline extended twice to May 2025.
By the end of June 2024, taxpayers had lost a total of Sh494.2 million due to delays on the project, even as this denies communities in the area the benefits of better irrigation services that would boost food security.
“The taxpayers have, therefore, gone at a loss of Sh494,222,305 due to delay in completion of the project,” Ms Gathungu said.
In the year ending June 2024, it was expected that Sh3.35 billion would be spent on the project, but only Sh1.47 billion was used after 47 per cent of the expected funding failed to come through.
The National Irrigation Authority (NIA) attributed the low spending to the slow pace of the release of counterpart funds by the government.
The Auditor-General noted that out of the Sh1.39 billion spent on the project in the year to June 2024, Sh697 million was on construction and civil works.
The Auditor-General, Nancy Gathungu, when she appeared before the County Public Investments and Special Funds Committee (CPIC) chaired Otieno Kajwang at the Bunge Tower Nairobi on Tuesday, March 4, 2025.
This means that the Sh285 million payment for idle time and interest charges accounted for 40.9 per cent of all payments made for construction works during the year.
“The management in a letter dated December 5, 2023 stated that the progress of works was hindered due to delayed land acquisition by the National Land Commission, which occasioned additional costs from claims and extensions of time. It was, however, not clear why IDA (International Development Agency) approved the commencement of work when the compensation for land had not been completed,” Gathungu observed.
The audit revealed that by October last year, the government had not compensated some of the Busia and Siaya residents whose land was taken for the project, with Sh140.87 million unpaid.
The government spent Sh211.6 million during the year to June 2024 on compensation of residents whose land was acquired for the project.
