The huge sums of money in penalties that the government is facing for shady contracts are simply mind-boggling.

They may be due to the incompetence of the officials involved or could be an extension of the endemic corruption in the public sector.

Taxpayers now risk paying a whopping Sh17 billion, which will most likely deprive them of resources that could have been used for their well-being.

And to make matters worse, the arbitration and court awards to local and foreign companies continue to accrue interest.

According to the National Treasury disclosures for the 2025/2026 financial year, some contractors have either gone bankrupt, are mired in corruption allegations, or are reeling under the weight of long-overdue debts.

These costly court and arbitration decisions are turning out to be expensive lessons for the government on contract law. Some of the contractors’ dues have remained unpaid for several decades.

The contracts for construction projects ranged from energy, roads, and infrastructure to health and real estate ventures.

In one case arising from the building of an electricity transmission line by a foreign company, a government agency was found by arbitrators to have unfairly terminated the contract. It paid another firm to complete the project, but was later slapped with the penalty.

Corruption rears its ugly head in the contracts by government agencies. Therefore, one cannot rule out connivance with potential litigants for the personal gain of crooked government officials.

Controller of Budget Margaret Nyakang’o says failure by some State agencies to carry out due diligence has largely contributed to the mess.

She has also pointed out that there are shady deals where people who do not deserve contracts end up being awarded and doing a poor job.

The government should, as the custodian of public interest and national resources, robustly defend commercial suits over project contracts.

It must also ensure procurement/contract laws are strictly followed in awarding tenders for prudent use of public funds.