Government Explains Sh10.85 Billion Cost Increase in Talanta Sports City Stadium

The government has attributed the Sh10.85 billion difference between the initial estimate and contract value of Talanta Sports City Stadium to taxes, import-related charges and other costs that were not included in the project's original concept estimate.

Sports Principal Secretary Elijah Mwangi said the initial estimate of approximately Sh35 billion was prepared by University of Nairobi Enterprise Services (UNES) as a conceptual design before the project moved to the construction stage.

“The designs of this Raila Odinga Stadium were done by the UNES, that is University of Nairobi Enterprise Services. It was just a concept, and from the concept, the initial concept which they designed was costing to around the figure of Sh35 billion,” Mwangi said.

He explained that the initial estimate did not factor in costs associated with actual contracting and construction, including taxes and expenses incurred when importing construction materials.

“For you to do the actual construction, there are other factors that had not been considered, mostly the taxes. So a contractor will have to pay taxes: the VAT, the withholding tax, and of course when you are importing, you'll have to pay the freight charges, the clearing charges,” he said.

Auditor-General Flags Sh10.848 Billion Variation

The explanation comes amid scrutiny by the Auditor-General and Parliament over the project's rising cost.

The Auditor-General flagged an unsupported Sh10.848 billion price variation between the Sh35 billion amount approved by the National Treasury and the Sh45.848 billion contract value.

The audit raised questions over the documentation supporting the additional cost. It also questioned the use of direct procurement and noted that clearance from the Attorney-General for the contract had not been provided for audit review.

The Senate subsequently sought explanations from the government over the cost increase, procurement process and financial arrangements surrounding the stadium.

Sports Cabinet Secretary Salim Mvurya had previously attributed the increase to taxes, levies and import-related charges, but senators questioned why those costs had not been incorporated into the initial estimate.

PS Defends Higher Contract Value

Mwangi maintained that the difference was a result of moving from a consultant's conceptual estimate to an actual construction contract.

He argued that tax obligations would arise because the government opted to engage a contractor to undertake the works.

“You may decide to contract. When you contract, you'll have to pay taxes to the contractor. If you do it yourself, you are not likely to pay taxes because there's no value addition,” Mwangi said.

He added that the contractor's tax obligations had to be incorporated into the final project cost.

“Because the government gave it to a contractor, the contractor had to pay taxes. From the 35, we had to consider the taxes that the contractor would pay because it is not a tax-exempt venture and that's how the difference came.”

However, the Auditor-General's finding remains that the Sh10.848 billion variation was not adequately supported by documentation. This leaves questions over how the additional expenditure was calculated and justified.

The audit also raised concerns about the direct procurement process and the absence of Attorney-General clearance for a contract valued at more than Sh5 billion.

Stadium Nears Completion

Talanta Sports City, now renamed Raila Odinga International Stadium, is a 60,000-seater facility at the Jamhuri Sports Complex in Nairobi.

The stadium is among Kenya's key infrastructure projects for the 2027 Africa Cup of Nations, which Kenya will co-host with Uganda and Tanzania.

Mwangi said the stadium is approximately 95 per cent complete, although associated infrastructure works, including a railway station and connecting roads, are still ongoing.

The government maintains that the increase from the original Sh35 billion estimate to the Sh45.848 billion contract value reflects taxes, freight, clearing charges and other costs that were not captured in the initial concept.

However, the Auditor-General's concerns over supporting documentation and Parliament's questions about the procurement process remain unresolved, keeping the stadium's final cost under scrutiny.