Move to regulate construction good for economy

-Editorial

Motorists using the Naivasha-Nakuru Highway talk highly of the road. Everything seems in place; the breadth of the road is excellent, the shoulders are great, the banking on the bends is perfect and the leveling is even. Seven years after its completion, it still looks as good as new.

Sogea Satom, a French-owned firm were the main contractors of the road funded by the European Union. It subcontracted the works to a Chinese firm. No Kenyan contractor took part in the construction. Instead, Kenyans did most of the menial work.

In future, this will not be the case. The National Construction Authority plans to introduce regulations in the industry to give local contractors a chance in the lucrative industry.

The proposals will be tabled in Parliament and if adopted, it will lead to a shift.

Foreign firms (mostly from China) have infiltrated the country’s construction industry winning contract after contract to put up roads, airports, buildings and the controversial Standard Gauge Railway.

Whereas Kenya’s is an open economy where anyone can compete to do business, there are growing fears that local firms are being slowly edged out of the construction industry, which is a key driver of economic growth.

Long used to cowboy contractors and briefcase companies, Kenyans have been wowed by the finesse, professionalism and sense of duty the foreign contractors have brought to the industry.

During the construction of Thika Road Highway, it was not unusual to find Chinese contractors working with floodlights at night.

In truth, most Kenyan firms have done shoddy work in the past: money has been paid for work not done or completed; there are cases where contractors have disappeared into thin air; or where briefcase companies win tenders then sell the deals to the highest bidder leading to higher costs to cater for kickbacks, bribes and unnecessary delays.

One case is the Kericho-Chemosit Road which was under construction for almost a decade. When it was finally done after two presidents the locals sighed with relief.

That need not be the case.

Things had gone so wrong and the entry of the foreign firms shook up an industry used to having its way. A few cowboy contractors have been run out of town.

A few still exist, but do less work than before.

But at what cost to the economy?

The name of the game is not unfairness, but opportunity. And the intentions of the National Construction Authority should be lauded. The opportunity cost of profit repatriation is huge to an economy like Kenya’s that is struggling to grow.

With locals having a 30 per cent stake in any firm bidding for big Government projects, it means part of the profits ends up in the local economy.

Nevertheless, care should be taken to ensure that the regulations do not deny Kenyans quality and value for money. All loopholes should be sealed to ensure that cowboy contractors do not find their way back.

It also ensures the transfer of knowledge and skills to the locals. There has been an outcry over the employment of expatriates for skills that the local market can provide. No one should begrudge locals their outrage over the hiring of a foreign national to operate an automatic-gear earthmover.