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When the Consortium Signs Without Reading the Fine Print
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They thought they had it all figured out. As usual. Nobody wants to recognize that they went for drinks too soon. Especially, when you have a dream team of financiers and consultants. Kenya, the World Bank, the UK, the Netherlands, the European Community… all sitting at the table in 1977. ​ The plan? A massive irrigation and settlement project in Bura. Price tag: USD 112 million. Return: a promised 13% ERR. ​ Wet dreams on paper… ​ Except… they didn’t really know what they were signing. ​ Yeap… ​ That’s happen when you put the bonuses too high on signature and non-existent at completion. ​ Consultants rewrote the design halfway through. Concrete costs +138%. Excavation +255%. Economic return collapsed to 4%. ​ The UK’s CDC walked away. Kenya was suddenly forced to carry 50–65% of the entire bill. ​ And the settlers? By 1996, a third had abandoned the land. The rest were barely surviving, relying on relief food. ​ By 1997, El Niño floods wiped out critical dykes. The irrigation canal became a drainage ditch. What was meant to “feed the nation” ended up feeding a case study in how NOT to do a project. ​ The Lessons (brutally honest) A big consortium means nothing if nobody owns accountability. Design scope creep kills returns. Consultants don’t carry the cost, you do. Don’t count money until it’s in the bank. A partner pulling out mid-way can collapse the whole house of cards. Reality beats PowerPoint. Models said 13%. Real life delivered 4%. ​ Every failed project, PPP or else, I’ve studied has the same DNA: Overconfidence. Poor governance. Poor procurement. And a consortium that signed up to something they didn’t fully understand. ​ For other terror stories, you can click below. ​
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Vicente Valencia
I talk about Personal Growth, Management, Infrastructure and More | C-Suite Executive | Mentor, Coach, Strategic Consultant | Real Estate Investor | 👇JOIN +2k readers 👇
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