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Factories fall silent as Industrial Area chokes in fog of neglect

FINANCIAL STANDARD
By Macharia Kamau | October 5th 2021

An aerial view of Nairobi’s Industrial Area. [Courtesy]

For years, Nairobi’s Industrial Area was synonymous with Kenya’s manufacturing sector.

Sadly, however, it appears that the country’s best known industrial hub’s best days are well behind it, never to be reclaimed.

Some of the factors that have contributed to Industrial Area’s gradual decline include years of neglect by State entities in charge of infrastructure.

Poor roads, unstable and costly electricity and water supply have been blamed for a mass exodus of manufacturers from the area, sometimes relocating to other countries, while those who remain have seen their output decline significantly.  

To stem the growing exodus from the country, the government has resorted to gifting cheap power rates to industries that will set up at the upcoming Naivasha Special Economic Zone (SEZ).

Companies that will operate at the SEZ will pay a rate of Sh5 per unit of electricity (Kilowatt hour – kWh) they consume, while their counterparts in Nairobi’s Industrial Area continue to be bogged down by high power costs.

This has seen new entrants into Industrial Area reduced to a trickle, with many firms moving to new and emerging hubs such as the Naivasha SEZ despite renewed efforts to bring back the hub’s glory days by dualling roads and stabilising power supply. 

The challenges industrial area faces may have played part in the manufacturing sector’s decline over the years.

The Kenya Association of Manufacturers (KAM) in previous reports has noted that the area hosts a majority of its members.

The sector’s contribution to Gross Domestic Product (GDP) has been on a consistent decline to stand at 7.3 per cent last year.

It stood at 7.9 per cent the previous year, according to the latest data by the Kenya National Bureau of Statistics (KNBS).

The decline has been seen over the last decade. In 2011, the manufacturing sector’s contribution to GDP stood at 11.8 per cent. 

Among the projects that are aimed at breathing back life into the manufacturing hub is the dualling of the 1.7km section of Likoni Road between Lunga Lunga and Jogoo Road.

While well-intended, it has, however, caused pain for manufacturers who have had to grapple with major traffic disruptions due to the closure of connecting roads.

Warehouses along Mombasa Road, Nairobi. [Elvis Ogina, Standard]

The timelines for completion of the project have also been hazy, with manufacturers complaining of delays.

But Kenya Urban Roads Authority (KURA) said the project is on track and is scheduled for completion in March next year.

The roads agency said the delay has been occasioned by several challenges, including relocating utilities such as power, water and sewer lines. 

A segment of the road also passes over a railway line, whose design has become a source of conflict between KURA and Kenya Railways (KRC).

“We have experienced major delays in the relocation of power, sewer and water lines. Sewer and water lines are hard to locate because the owners, Nairobi Water and Sewerage Company, have no proper data to assist in locating the same,” said KURA Corporate Communications Officer John Cheboi.

“Kenya Power kept increasing the scope of relocation because of underground cables, which were unknown to them and were identified after excavation. This necessitated the construction of new service ducts and prolonged relocation period,” added Mr Cheboi.

“The other issue is from Kenya Railways, which gave us new unforeseen conditions as well as a prolonged structural design process.”

The road segment has been closed to traffic for the better part of the time that the contractor has been on site.

But not much progress has been made in terms of construction. Management of both vehicular and non-motorised traffic has been a challenge, with people and cars sharing the same pathways with the earthmovers.

Kenya Power said it is working with KURA and the contractor – Cementers Ltd – to relocate the electricity lines. So far, it said, it has received funds to relocate 80 per cent of the affected network. The road agency usually foots the bill for relocating utilities from the construction site.

“In this particular case, the contractor has reached out to us to move our infrastructure from a portion covering 1.9 kilometres. The contractor made an initial payment to facilitate relocation works on a section covering 1.5 kilometres. Plans are underway to expeditiously attend to the remaining section as soon as the contractor pays the balance to facilitate the relocation,” said Kenya Power.

KRC downplayed differences with the roads agency. KRC Managing Director Phillip Mainga said KURA had reached out and agreed on the design of the bridge that goes over the railway line.

“There is no dispute between ourselves and KURA. We have always worked together. It is the same case with this project, where we have provided our input,” he said.

The ongoing construction work at Likoni Road is not the only concern for manufacturers and other road users.

Kenya Association of Manufacturers Chief Executive Phyllis Wakiaga noted that rarely do contractors provide alternative routes when starting new projects.

“This is especially done as a cost-saving measure from their end at the expense of road users. A recent example was on East Gate Close where the contractor had to close the stretch for 10 days to allow ‘healing’,” said Ms Wakiaga.

“This inconvenienced manufacturers who could not access their premises for the duration. Since there is a need for a road to be done and no alternative provided, manufacturers have no option but to abide by directives despite the huge losses and resulting inconveniences. It becomes worse when communication on temporary closures and diversions is delayed or not relayed at all.”

Newly-constructed warehouses, Athi River. [Fie, Standard]

The problems that users are experiencing on Likoni Road brings back memories of many other delayed road projects.  

At the same time, contractors do not offer alternatives or even proper traffic management in the case that the road is open to traffic while undergoing construction.

Such was the case with the construction of Enterprise Road, also in the area, which took nearly a decade.

This caused a major inconvenience to manufacturers and other road users. 

The different government entities say they have in recent years invested heavily in improving Industrial Area’s infrastructure.

This is, however, too little too late, with many companies already having closed shop or relocated.

The sector’s contribution to GDP is at a record low, with expectations that it could increase to 15 per cent in line with President Uhuru Kenyatta’s Big Four agenda now a mirage ahead of next year’s general election.

KURA’s Cheboi said the notion of dilapidated roads in Industrial Area stems from a “historical” perception.

He said the agency has in recent years invested heavily in refurbishing and upgrading the road network in the manufacturing hub.

“Likoni Road is just one of the last projects that we are doing in Industrial Area, and once complete, we will have a network of good roads there,” he said.

“KURA has spent a lot of money in building roads in Industrial Area. Enterprise Road is now passable, and all other small roads are in a good condition. Nanyuki Road had a problem with drainage as well as many lorries picking petroleum products, but this has been fixed.”

Kenya Power said it has since 2014 undertaken major projects aimed at improving the reliability of electricity supply to industrial customers across the country, not just Industrial Area.

“The company has undertaken a number of initiatives towards this, beginning with 2014 when we rolled out the Boresha Umeme Viwandani programme targeting Nairobi’s Industrial Area and other manufacturing hubs in major cities and towns across the country,” said Kenya Power.

The programme entailed extensive rehabilitation of the electricity distribution network that included reconductoring and creating redundancies.

KRC said it has recently been refurbishing railway lines to enable industries to access cargo with ease. MD Mainga noted that this is not restricted to Nairobi’s Industrial Area but also involves other hubs such as Thika.

“Over time when there was disinvestment in Industrial Area, most of the manufacturers changed how they imported or exported cargo and the lines fell into disuse,” he said.

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