Government explains Sh10.85 billion variations in Talanta Stadium cost

Sports Principal Secretary Elijah Mwangi said the initial estimate of about Sh35 billion was prepared by University of Nairobi Enterprise Services (UNES) as a concept before construction was handed to a contractor.

“The designs of this Raila Odinga Stadium was 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 35 billion,” Mwangi said.

He futher said that the estimate did not account for costs arising from the actual contracting and construction process, including VAT, withholding tax, freight and clearing charges on imported 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.

The explanation follows scrutiny by the Auditor-General and Parliament. The Auditor-General flagged an unsupported Sh10.848 billion price variation between the Sh35 billion approved by the National Treasury and the Sh45.848 billion contract value. The audit also questioned the use of direct procurement and noted that Attorney-General clearance for the contract had not been provided for audit.

The Senate subsequently sought explanations over the cost increase, procurement process and financial arrangements surrounding the project. Sports Cabinet Secretary Salim Mvurya previously attributed the increase to taxes, levies and import-related charges, while senators questioned why such costs were not reflected in the initial estimate.

Mwangi maintained that the difference arose from moving from a consultant's concept estimate to actual construction through a contractor.

“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,” he said.

He also said the contractor's tax obligations therefore had to be factored into the final 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 variations was unsupported by adequate documentation, leaving questions over how the additional cost was justified. The audit also raised concerns over the direct procurement method and the absence of Attorney-General clearance for a contract exceeding Sh5 billion.

Talanta Sports City, now renamed Raila Odinga International Stadium, is a 60,000-seater facility at Jamhuri Sports Complex in Nairobi and is one of Kenya's key venues for the 2027 Africa Cup of Nations. Mwangi said the stadium is about 95 per cent complete, although associated works, including a railway station and connecting roads, are still ongoing.

The government maintains that the higher cost reflects taxes and import-related charges omitted from the original estimate, while the audit findings and parliamentary scrutiny over the supporting documentation and procurement process remain unresolved.