Local vehicle assemblers could miss out on supplying buses that will be used on the Bus Rapid Transit (BRT) system.
The companies could be outmuscled by more established international firms on, among other stringent requirements, the capacity to deliver electric or biodiesel-powered buses.
None of the local assemblers currently produces such vehicles. The government last month started sourcing 300 BRT buses as it prepares to start the implementation of the system on Thika Road.
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BRT is a bus-based public transport system designed to have a better capacity and reliability than a conventional bus system.
The Nairobi Metropolitan Authority (Namata) said 100 buses will be used for the pilot phase, whose implementation phase is set to start in July this year.
The pilot project – referred to as the Inception Phase – will offer services between Kasarani and Nairobi’s Central Business District (CBD).
A later phase will use 300 buses and extend the service to Ruiru, while an even more ambitious phase will see about 660 buses shuttle commuters between Kenol (Murang’a County) to Ongata Rongai (Kajiado County).
Local vehicle assemblers could, however, miss out on the lucrative tender in which bus manufacturers will earn billions of shillings from leasing the vehicles under the new system.
This is mainly on account of the requirement for biodiesel, hybrid or purely electric buses, with local assemblers only producing buses that run on fossil fuels, such as diesel and petrol.
The uptake of electric vehicles in Kenya currently is estimated at five per cent, a majority of which are private vehicles.
The companies are also not enthusiastic about supplying the main BRT line and instead say there are opportunities in selling buses to matatu Saccos that will be plying on the BRT’s feeder networks.
The lukewarm reception by businesses to the BRT system, which the government expects to transform transport services on the busy Thika Road and with time greater Nairobi and its environs, could perhaps be due to past experience where they burnt their fingers.
They had built BRT buses on the promise that the State would buy them, but it later reneged on the promise.
Housing and Urban Development Principal Secretary Charles Hinga said the key consideration in selecting the buses would be quality.
“The thing is that we will not compromise on the standards. Namata has published the standards as part of this bidding process,” he said, adding that the buses that will ply the route also need to be of good design, perhaps an indictment on the craftsmanship of local vehicle assemblers.
“We also want good designs. The public wants something that looks good. When passengers are inside that bus, we want them to feel that it was designed with them in mind.”
Hinga also noted that some key components of the locally assembled buses are imported, which he said could work if the local bus builders worked with foreign companies.
“In bus making, you have the chassis… there is no Kenyan-made chassis, you will have to import anyway. When we talk about making buses in Kenya, I think people refer to the bodybuilding,” he said. He, however, added that there are provisions that would benefit local players.
These include the requirement for successful bidders for the tender to lease the vehicles to the BRT Bus Operating Company to transfer skills, which will, in the long run, see the buses being made locally.
Hinga added that there is also a requirement for the international firms to source 40 per cent of the contract value locally.
“We have provided phasing in terms of skills transfer because we want as many of these buses as we proceed to be made here,” said the PS.
“We have also said that we want 40 per cent minimum local capacity. If you make the body here, then you will have met your 40 per cent requirement.”
Hinga said Namata could be looking for a bus making company that has ready units, which could further lock out local firms.
“There is a premium we are willing to pay for anyone who has buses meeting our standards… if you have available inventory, we can review it,” he said.
In 2019, the government was gearing up to start the implementation of the BRT system on Thika Road and even demarcated BRT lanes. It had planned to import buses from South Africa, a move that kicked up a storm.
Those opposed to the plan argued that Tanzania had sourced BRT buses for the rollout of the system in Dar-es-Salaam, using buses built in Kenya, and there was, therefore, no reason why Kenya had to buy its buses from South Africa.
Dar was the first city in East Africa to successfully implement such a public transport system.
The government yielded to pressure and offered to buy some of the buses locally but later abandoned the plan, leaving local players with units that they could not dispose of in the open market.
Then and now, the seeming preference for the foreign-made units appears to pour cold water on the “Buy Kenya, Build Kenya” campaign meant to support local industrial production.
Isuzu East Africa Chief Executive Rita Kavashe said the stringent requirements would see local players unable to compete in the bid to supply the BRT buses.
She said the local industry would look at other opportunities arising from the implementation of the BRT system.
“They want electric buses, but none of the local players has electric buses as yet,” said Kavashe, adding that while Isuzu East Africa plans to produce electric buses, this is a long-term plan.
While Isuzu is yet to explore partnering with international companies for the production of the buses, she noted that there are other opportunities, not just for vehicle assemblers but a host of other industries.
“We have not considered that (partnerships), but the 40 per cent local content could be financing or body construction of the rolling stock… so there is an opportunity for that. So far there is nothing concrete as the tendering process is still in the early stages,” she said.