The new cement factory being put in Pokot will cost more than the projected KES12bn due to inflation and poor infrastructure in the country.
Managers of Cemtech Limited, the company licensed to construct the factory, said the weakening of the shilling against international currencies would drastically increase the cost on importing raw materials for the project.
"We have reviewed the projected cost of the project and realised that the amount we quoted would have to rise," Cemtech Limited Director Rajesh Kumar Rawal told journalists on Monday.
However, he pointed out that the firm was committed to completing the mining project on time, adding that it would play a major role lifting the economy and livelihood of local people.
"We are contented with the support we are receiving from the Government, local leaders and area residents, and we want to assure that the project would be completed despite the challenges," he added.
Average retail prices of cement in India have increased by about three per cent month-on-month to INR289 per bag, and by almost 17 per cent YoY, says CRISIL Research report.
Cement prices remained northbound in November 2011. With an increase in the pace of construction activity, cement demand rose by about 19 per cent year-on-year during the month, over a low base. Average retail prices of cement therefore increased by about three per cent month-on-month to INR289 per bag, and by almost 17 per cent YoY.