Project Cost Estimation and Performance of Donor-Funded Public Health Projects in Kenya

Abstract

Accurate cost estimation is a critical component of project management and plays a significant role in determining the success of donor-funded public health projects. Despite increased funding from development partners, many public health projects in Kenya continue to experience budget overruns, resource inefficiencies, and implementation challenges that negatively affect project performance. This study aimed to examine the relationship between project cost estimation and the performance of donor-funded public health projects in Kenya and to assess the moderating role of Organizational Process Assets on this relationship. Organizational Process Assets were conceptualized as organizational culture, policies, and procedures that support project implementation and decision-making. The study adopted a positivist research philosophy and a descriptive research design. Data were collected from donor-funded public health projects implemented within the Lake Victoria region of Kenya using structured questionnaires and other complementary data collection methods. Quantitative data were analysed using descriptive and inferential statistics, including correlation, regression, and moderation analyses. The findings revealed that project cost estimation was positively and statistically significantly related to project performance (β = 0.519, p < 0.05). The study established that cost estimation explained 26.9% of the variation in project performance (R² = 0.269), making it the strongest predictor among the project cost management practices examined. The findings indicate that accurate forecasting of project costs enhances resource allocation, minimizes budget deviations, and improves the likelihood of achieving project objectives. The study further established that Organizational Process Assets significantly moderated the relationship between project cost estimation and project performance. The inclusion of Organizational Process Assets increased the model's explanatory power from 33.6% to 56.8%, demonstrating that strong organizational culture, effective policies, and well-defined procedures enhance the effectiveness of cost estimation practices and improve project outcomes. The study concludes that accurate cost estimation is a key determinant of performance in donor-funded public health projects. It further concludes that Organizational Process Assets strengthen the contribution of cost estimation to project success by promoting consistency, accountability, knowledge sharing, and informed decision-making. The study recommends strengthening institutional cost-estimation frameworks, enhancing staff capacity for project costing, and investing in robust organizational systems and procedures to improve the performance and sustainability of donor-funded public health projects.