Government Explains Sh10.85bn Rise in Talanta Stadium Project Cost

The government has attributed the sharp increase in the cost of the Talanta Sports City project to taxes, import expenses and other charges that were not factored into the original estimate.

The project's cost has risen from the initial Sh35 billion to Sh45.85 billion, representing an increase of Sh10.85 billion. The development includes the 60,000-capacity Talanta Stadium, which has since been named the Raila Odinga Stadium.

The significant rise in the budget has attracted scrutiny, particularly following concerns raised by Auditor-General Nancy Gathungu over the project's procurement process and escalating costs.

Government blames taxes and additional charges

Sports Principal Secretary Elijah Mwangi explained that the original Sh35 billion figure was based on a preliminary concept prepared by the University of Nairobi Enterprise Services (UNES), rather than the final cost of constructing the facility through a contracted company.

According to Mwangi, the initial estimate did not include expenses such as value-added tax (VAT), withholding tax, freight and customs clearance charges.

He said these costs became necessary once the government moved from the design stage to actual construction through a contractor.

Mwangi argued that the initial figure represented the basic construction estimate provided by the consultant and did not account for the additional financial obligations that would arise from contracting the project.

“When you ask a consultant to design a project for you, they will give you the minimal cost,” Mwangi explained.

He added that contracting the construction meant taxes had to be incorporated into the final project budget because the stadium project was not tax-exempt.

Auditor-General raises concerns

The explanation comes after an audit report released in February 2026 raised questions over the project's increased cost and procurement process.

Gathungu questioned the award of the construction tender to Linzi Finco LLP, arguing that the procurement process did not comply with provisions of the Public Procurement and Asset Disposal Act.

The Auditor-General also noted that her office had not been consulted for the required clearance during the procurement process.

The government has rejected suggestions that the Sh10.85 billion increase was caused by inflated construction costs, maintaining that the difference largely reflects taxes and other expenses omitted from the initial estimate.

Delayed payments could increase costs further

The project could face another financial burden if delays in paying the contractor result in interest charges.

Gathungu warned that outstanding payments to Linzi Finco LLP could attract interest calculated at three percentage points above the Central Bank of Kenya's average lending rate, which stood at 14.3 per cent.

That would put the potential interest rate at approximately 17 per cent, raising the possibility of further costs being added to an already expanded project budget.

With the stadium's cost continuing to attract scrutiny, the government will face increasing pressure to account for the project's expenditure and ensure that additional financial obligations do not push the final bill significantly higher.