Money Markets

Konza city launch opens new frontier for investors

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A model of Tatu City. File

A model of Tatu City. File 

By MUNA WAHOME

Posted  Tuesday, January 22   2013 at  21:07

In Summary

  • Mr Kibaki will launch the physical development phase that had been scheduled to have started late last year.
  • The Director-General of Vision 2030 Delivery Secretariat, Mugo Kibati, said investors had responded positively to Konza.
  • Asian investors, especially from China, were mainly interested in construction while their European and American counterparts were more interested in the data processing business.

Mr Ngumi said he draws inspiration from the phenomenal development of the Kenya telecoms sector in which he has been a major backroom player for over a decade.

One of the initial Communications Commission of Kenya directors, he resigned in early 2000 to avoid conflict of interest by his new employer, Citi, a large player in the then fledgling sector.

In his new role, he went on to craft major financing deals for Safaricom, Airtel, Telkom and Essar’s yu.

Mr Ngumi, the bank’s director for investment banking coverage, East Africa, believes Kenya can take a shortcut in the development process through the service and technology industries.

Questions have previously been raised about the size and viability of such a project in Africa more so in light of the fact that only places like Dubai and Singapore have successfully implemented the same.

Kenya is banking on International Finance Corporation (IFC), which has seen the project move from the controversial buying of the land to host the ICT park to Wednesday’s launch.

Dr Ndemo said a feasibility study conducted with the advice of the IFC indicated the project would contribute immensely to economic development in Kenya and eastern Africa.

Mr Kibati says while Angola has tried the concept and currently has 20 per cent occupancy, Kenya has a distinct advantage of having a strong domestic demand component.

“The Angolan economy is skewed while ours is dynamic. Locals want to be involved in both the supply and demand sides,” he said citing the huge interest by investors around the Konza City which compelled the Ministry of Local Government to carve out a buffer of 10 kilometres for zonal planned purposes.

The feel good factor has seen prices of land around the buffer zone rise to Sh3 million per acre from Sh100,000 three years ago.

Mr Kibati added that locals were showing strong interest in the integrated city particularly in the financial, hospitals and education centres.

Besides infrastructure and the science park, phase one will feature bits of the CBD and the financial hub which would be implemented fully in phase two. The first phase targeting early adopters would be implemented within five years and the second including light industries would take a decade.

Mr Ngumi believes Konza will form another leg for the Kenya economy.

In the coming few weeks the board, which met for the very first time on Monday, will be seeking to recruit a technical person to oversee the project.

Mr Ngumi said the kind of management required at the Hong Kong Science & Technology Parks was a good guide to the calibre of the right candidate. The Hong Kong parks host 400 companies employing 9,000 people and industrial estates with 160 factories employing 26,000 people.

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