Uhuru faults SGR contractor on 40pc procurement quota

A standard gauge railway locomotive engine is off loaded at the Mombasa Port from China. President Uhuru Kenyatta has questioned why local companies have not fully benefited from the provision of goods and services for the construction of the standard gauge railway. PHOTO | GEOFFREY MWANYANYA |  KNA

In Summary

• China Roads and Bridges Corporation (CRBC) is on the spot for failing to honour an agreement that requires it to purchase up to 40 per cent of materials and services locally.
• Data obtained from the Chinese company shows that it has used 30,000 tonnes of steel to date, out of which 10,000 tonnes — about 33 per cent of its intake was procured from the steel makers in the country.
• CRBC says it has established a material procurement cooperation with 360 major local suppliers and over 40 local subcontractors.

By IMMACULATE KARAMBU
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China Roads and Bridges Corporation is on the spot for failing to honour an agreement that requires it to purchase up to 40 per cent of materials and services locally.

In a statement on Monday, State House spokesperson Manoah Esipisu said President Uhuru Kenyatta had questioned why local companies have not fully benefited from the provision of goods and services for the construction of the standard gauge railway.

China Roads and Bridges Corporation (CRBC) is contracted by the government to construct a single track standard gauge railway between Mombasa and Nairobi at a cost of Sh327 billion.

“As of December 1, the civil works were more than 60 per cent complete.

However, the President is concerned that the construction company has not met its local content obligations and he made it clear that they must work to the target of 40 per cent,” said Mr Esipisu.

IMPORTED MATERIALS

CRBC has in the past come under criticism from players in various industries for its preference for imported materials over locally made ones.

Data obtained from the Chinese company shows that it has used 30,000 tonnes of steel to date, out of which 10,000 tonnes — about 33 per cent of its intake was procured from the steel makers in the country.

“Majority of what is used for construction of the SGR is imported.

We have made several complaints to the company and even the ministry of industrialisation,” said Devki Group CEO Narendra Raval.

CRBC says it has established a material procurement cooperation with 360 major local suppliers and over 40 local subcontractors.

(READ: MPs raise red flag over irregular SGR compensation)

The company also said that it is currently procuring all the three types of cement required for construction of the railway from local manufacturers.

“We import the material from other countries only when local manufacturers cannot produce or local material cannot meet the criteria of the project.

CRBC has been open to cooperation and dialogue with Kenyan partners and industries,” said Julius Li Juguang, manager, department of external relations and cooperation for the standard gauge railway project.

Last week, the parliamentary Public Investments Committee ordered investigations into the SGR project, saying that taxpayers risk losing money amid irregular claims of compensation to the affected land owners.