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Eldoret still waits creation of Sh200b industrial park

By Stephen Rutto | Jul 22nd 2020 | 4 min read
By Stephen Rutto | July 22nd 2020

Former Kipchamo chief George Tarus points at a signage indicating where the Africa Economic Zone (AEZ) was to be built in Uasin Gishu County at Kipchamo location. [Silah Koskei, Standard]

In 2017 youth from Eldoret for a moment believed their prayers had been answered after seeing the ground-breaking ceremony to initiate construction of a multi-billion project to create 40,000 jobs.

The creation of the Sh200 billion special economic zone was one of the country’s most ambitious projects by the private sector.

Africa Economic Zones (AEZ), owned by businessman David Lagat and Guangdong New South Group, a Chinese company, set off an ambitious plan that would turn around Eldoret’s fortunes for the better.

However, the timing of the launch was suspect, just a month to the 2017 General Election. The idea and its launch got the national limelight. Political campaigns were in top gear and talk of projects, which would create employment to the youth, excited Kenyans.

Fast track to 2020, three years after the launch, a visit to the economic zone will confirm that less than 10 people have put up solar plants in the privately-owned enterprise. The zone is deserted and there is no smoke billowing to the skies from any industry on the site.

Agro-processing, cottage, energy, machinery, engineering and construction, fast-moving consumer goods, electronics, and ICT, as well as chemical and pharmaceutical companies, were listed as key industries that would start and position Eldoret as an export town.

Deputy President William Ruto represented President Uhuru Kenyatta, who had been scheduled to preside over the ground-breaking ceremony.

“This economic zone will help to improve the returns of farmers and create jobs for our youth. This is how we are going to deal with poverty and unemployment,” Ruto said then.

Pioneers of the economic zone had expressed confidence in the availability of skilled and unskilled labour in the region and on the other hand, jobless youth hoped to secure employment.

Soon after the launch, construction began in the special 700-acre proposed industrial park located in the serene plateau area of Kesses constituency, about seven kilometres from Eldoret town.

Nearly 100 Chinese nationals attended the ceremony. But later in 2018, activities started fizzling, save for a solar power plant.

Pipe dream

Lagat, through AEZ, in partnership with the Chinese firm indicated that it would employ 2,500 youth in establishment of the processing plants.

But the question that lingers in the minds of many people is what happened to a monumental project that had the backing of the government?

The Standard has learnt that the Chinese partner, and which could be the main financier, quit the ambitious plan in unclear circumstances, which threw the construction in limbo.

Sources privy to the operations of the Kenyan partner, AEZ, said 400 enterprises were expected to set base in the processing zone.

“No industry has been completed so far. The solar panel project is almost complete. It is the only project that is ongoing,” the source working for AEZ said.

He said alongside the Special Economic Zone is a solar power plant, which is expected to generate 40 megawatts of power. The plant is owned by Lagat’s DL group of companies and two other foreign firms.

The solar power plant will be managed by two investors, Selenki and Cedate from the Netherlands, according to a source at AEZ.

Just before the Chinese firm developed cold feet, a senior manager in the AEZ project, Vagas Chung, had in 2018 expressed displeasure with what he termed as tough regulations outlined in the Special Economic Zones Act, 2016.

He said the Act spelled out several obligations including benefits to local residents, waste disposal and land use, which should be met by investors in industrial parks.

Lagat is a shrewd businessman described by sources close to him as a secretive man with interests in real estate and agriculture. He is media-shy, but has connections with powerful individuals in government and top investors in Asia and Western countries.

The industrial park was expected to attract about 2 billion US dollars of foreign investments, according to a 2018 statement by EAZ.

According to Governor Jackson Mandago, the project would benefit from readily available human resources and expertise from the institutions of higher learning in Eldoret and neighbouring areas.

Mandago, who is the North Rift Economic Bloc chairman, says the project would transform the livelihood of residents in the region.

“Uasin Gishu is strategically placed and is a link to the western circuit of Kenya as well as East and Central Africa. Further, the county has well-established infrastructure including road, rail and air together with numerous financial institutions,” he explains.

Lagat, 54, admitted that there were delays in completion of the project.

Unplanned delays

“It was to help thousands of youth get jobs, but we are facing some delays,” he said on the telephone. "The solar power project is not part of the industrial park though its construction is ongoing. We will give a detailed explanation on why construction at the industrial park has not begun."

Youth in the area said they were yet to benefit from the industrial park.

“We had high hopes of securing jobs, but we do not understand why the projects have not started. We can only see the solar project going on. What happened to the other industrial projects,” Willy Kiprop, a resident, asked.

Information at AEZ offices in Eldoret indicates Lagat is running several companies among them Koisagat Tea Estate in Nandi County and Kapchebet Tea Factory in Kericho County.

He also owns solar-power generating company Selenkei Investments and the archetypal Nyali Centre in the coastal city of Mombasa.

Sunrise Resort, also in Mombasa, ranks among his properties.

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