Engineers push for new levy to bridge manpower deficit
Workers on a section of Berth 20 at Mombasa port. Such projects are targeted by EBK for more taxation. PHOTO | FILE
What you need to know:
The plan estimates that the levy will see EBK collect Sh11.9 billion in the next five years to cover the training of 9,900 graduate engineers.
Proposed levy looks set to pile more fees on the construction market which has recently witnessed increased taxation.
Currently, there are only about 1,900 professional engineers and over 9,000 graduate engineers with most unable to meet the stringent qualifications imposed by the board.
The engineering watchdog has proposed the introduction of a one per cent levy on infrastructure projects to fund internships for students pursuing technical courses.
The proposal by the Engineers Board of Kenya (EBK) comes several months after the introduction of a 0.5 per cent levy imposed on all construction projects valued above Sh5 million.
The board, in its five-year strategic plan unveiled Tuesday, said that in the absence of such funding, the country risks a shortage of engineers to shepherd the multibillion shilling infrastructure projects on which Vision 2030 is hinged.
“With the levy of only one per cent on infrastructure project cost, Kenya would be able to meet the graduate engineers’ internship costs both for the current number that is unregistered and future engineering graduates of all disciplines,” reads part of the plan.
The plan estimates that the levy will see EBK collect Sh11.9 billion in the next five years to cover the training of 9,900 graduate engineers.
The programme aims to have the graduates undertake a two-year internship with the levy covering their costs rather than the government picking up the tab. But the proposed levy looks set to pile more fees on the construction market which has recently witnessed increased taxation.
The National Environment Management Authority (Nema) has also issued a gazette notice dated September 17 that imposes a minimum charge of Sh10,000 or 0.1 per cent of project costs for environment impact assessment.
The Mining ministry, from September 2013, started collecting a two per cent royalty on construction materials — increasing the cost of quarry stones, concrete blocks, hardcore, ballast and sand.
The EBK strategic plan does not however define what capital/infrastructure projects are eligible but a lot of projects the government and private companies are undertaking, like roads fall under this general category. Combined with the construction levy, a contractor undertaking a Sh1 billion infrastructure project for example would have to pay Sh15 million to the National Construction Authority and EBK.
“The EBK board and the Institute of Engineers should undertake vigorous lobbying with government and MPs for imposition of the levy to ensure the country’s self-sufficiency in supply of professional engineers to meet development goals,” the plan adds.
Currently, there are only about 1,900 professional engineers and over 9,000 graduate engineers with most unable to meet the stringent qualifications imposed by the board.
Alternatively, the board has proposed a 0.5 levy to fund internships for graduating engineers as the government directly funds the current backlog of unregistered engineers.
Transport secretary Michael Kamau had asked EBK to come up with a way of boosting the number of registered engineers as the country continues to roll out major projects like the road annuity programme.
The EBK said that the proposed levy is modelled along a catering levy that was imposed on the hospitality industry in the 1980s and has since led to exporting of hospitality professionals.
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