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Transport pushes building budget through the roof

REAL ESTATE
By Graham Kajilwa | June 24th 2021

Industrial dumper trucks working on highway construction site, loading and unloading gravel and earth. heavy duty machinery activity.[Getty Images]

Building materials seem fairly affordable when you are planning to construct a house. 

For example, a bag of cement goes for Sh550 and a piece of stone at Sh20, so you do your calculations and determine that the total cost is within your budget.

Then it dawns on you that these building materials are to be transported to the site. And quarries are not next door, they are kilometres away. When you factor in the transport, your budget goes through the roof.

For people who are building for the first time, this can be daunting and a dampener on their dreams to own a home.

Suppliers of building materials say the price of transport can double the total cost, with truckers making a tidy sum in the business.

This means that if you have your own transport, preferably a truck, you can cut your costs by half by ferring the materials from source.

Graphics: The Standard

Milton Koech, who supplies building materials, says his experience with numerous clients has forced him to change his pricing model.

He says he combines the price of stone and transport and gives the client the total.

“It is usually challenging in marketing when you tell someone the price of stone and they see it as cheap, then when you add transport they shy away,” says Mr Koech.

While a piece of machine-cut stone would cost Sh25, for instance, he quotes a price of Sh65 inclusive of transport.

But why is transport so expensive?

Moses Kibe, another supplier, says distance to the site, fuel prices, the type of lorry used and the trips it makes play determine the charges.

Other factors are where the materials are being collected and the number of stones or weight as well.

Mr Kibe also says the fees charges by county governments on materials such as sand and quarry stones differ.

Machakos is the most expensive, he says, where you could pay up to Sh3,000 compared to Nairobi or Kiambu where one pays Sh400.

Thika and Juja towns are known for building stones. If one wants to buy the stones for a project in Kitale or Eldoret, then they should be ready to pay almost Sh30,000 for transport.

However, the cost varies are most people prefer to use trucks that are either going back upcountry after delivering goods to Nairobi or Mombasa, whose owners may charge less rather than the vehicle returning empty. 

“For 700 pieces from Thika to Eldoret, the lowest price is Sh26,000. This is transport alone,” Kibe says.

A six-by-nine inch stone costs Sh20 at the quarry, he says. Buyers should add Sh2 (Sh1 for loading and the other for offloading) for every stone.

The local authority at the quarry will charge Sh400 per truck.

“So to get the stones from the quarry to the road it will cost you Sh22 per stone plus the Sh400,” says Kibe. “Remember you bought 700 stones at Sh22 each, which brings the cost to Sh15,400.”

Kibe justifies the Sh26,000 transport cost, saying the truck will use between Sh10,000 and Sh12,000 on fuel.

“The calculation here is that when the owner of the vehicle deducts fuel costs, they remain with around Sh9,000 with the driver and conductor having been paid as well,” he explains.

“Remember, it is from this Sh9,000 that the owner expects to get insurance for the truck, service, repair a puncture and repay loans if the vehicle was bought on credit.”

When you add Sh15,400 as the total cost of the 700 stones to that of transport, you total cost per trip is Sh41,400.

“If you divide this with the 700 stones you bought, you notice that you bought each stone at Sh60. But initially, when you bought from the quarry, you got each stone at Sh20,” Kibe says.

“You realise the price of transport more than doubles the cost of the stone.”

Taking Koech’s estimation that a three-bedroom house will use not less than 2,000 stones, it means for a developer to transport enough stones to the site in Western Kenya or Rift Valley, it will cost them not less than Sh123,000 yet the actual cost of all the stones (2,100) is Sh42,000.

“Whenever you transport stones to Nyanza or Western regions when you compare the cost of transport per stone, it is always double or even more (the actual cost of stone),” he says.

“If you give the price of a stone at Sh27, many clients won’t buy, but when you tell them it is Sh65 inclusive of transport they are content and buy.”

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