Ongoing construction works of the standard gauge railway in Voi on March 15. PHOTO | FILE
By EDWIN OKOTH, edokoth@ke.nationmedia.com
In Summary
Kenya has paid foreign suppliers Sh167 billion for
the ongoing construction of the standard gauge railway (SGR), leaving
only a small share for locals in the multi-billion shilling project.
The amount represents 72 per cent of the money so far spent on the mega project whose civil works are 80 per cent complete.
Transport secretary James Macharia said the 28 per
cent share that local businesses have earned from the multi-billion
shilling project came through deliberate push, signalling a
determination by the Chinese contractor to enjoy its full benefits.
“From Mombasa to Nairobi, there have been
complaints that the contractor did not meet the obligation of taking up
materials from local suppliers and even the 28 per cent has been won
through a big push,” Mr Macharia said.
He added that the second phase of the project would
make it a contractual obligation that 40 per cent of the supplies be
sourced from local businesses.
The minister spoke when he met the National
Assembly’s Transport Committee chaired by Starehe MP Maina Kamanda to
update them on SGR’s progress.
The multi-billion shilling SGR outflows are what
Kenya needs to reduce its negative balance of payments position that
stood at more than Sh6 billion in the year to November 2015, having
deteriorated from a surplus of Sh87.2 billion a year earlier.
Mr Macharia said Kenyan businesses supplying SGR’s
civil works have so far earned Sh65 billion and will hopefully make
more money in the second phase that covers the Nairobi-Naivasha section
and whose construction will begin in September.
The 120km stretch is expected to consume large
volumes of steel and other raw materials with its 74 bridges and seven
tunnels in the rugged terrain of the Rift Valley.
“We estimate about $600 million will be paid to
local suppliers and this is not just for sand and timber, but also
materials such as spare parts that the contractor will require,” Mr
Macharia said.
The huge share of the payments already taken up by
foreign suppliers leaves only Sh94 billion of the SGR’s Sh327 billion
budget for the Mombasa-Nairobi section of the project.
Devki Group, the Kenyan conglomerate that
manufactures steel products, roofing sheets and cement, has, however,
disputed even the 28 per cent share that Mr Macharia claims has been
paid to locals.
Narendra Raval, the company’s founder, said
contribution from locals has been diluted through the purchase by locals
of foreign goods to supply the SGR project.
“Almost everything is imported in this project and
if they are referring to the local content as Kenyans importing goods
from China, then we are missing the point,” Mr Raval said, adding that
local content has not amounted to even five per cent of materials used
to build the SGR
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