Standard gauge rail material supplies earn local firms Sh23.5bn

Local firms have supplied material and services worth Sh23.5 billion to the standard gauge railway project with cement-maker Bamburi the largest beneficiary, China Road and Bridge Corporation (CRBC) said Thursday.

The contractor of the Sh327 billion Mombasa-Nairobi standard gauge rail said it bought more than 150,000 tonnes of local cement. It was responding to allegations it imports Chinese cement.

“It is cheaper to buy materials locally as opposed to importing the same due to inflation of costs that come with the logistical rigours of importing goods,” said Julius Li, CRBC manager for external relations and cooperation.

CRBC said it acquired the cement from four manufacturers but more than 100,000 tonnes cement was sourced from Bamburi Cement. The other factories were East African Portland Cement, ARM Cement and Savannah Cement.

Manufacturers had accused the Chinese firm of importing the locally available material reneging on a contract signed in December last year with the cement makers.

READ: Cement firms defy rows in rail plan to sign deals

CRBC said it has not imported any cement since the project started beginning of this year and has only been purchasing from local manufacturers that have met the set standards.

Importation of construction materials would deprive the country estimated 1.5 per cent economic expansion expected from infrastructure project and the 40 per cent local content. Heavy importation of raw materials has a negative impact on the shilling as it creates demand for the dollar.

The Chinese firm had also been accused of bringing in high numbers of unskilled labourers from China. The contractor, however, has said it has employed 10,000 Kenyans and hopes to hire more as the project progresses.

Earthworks, which include levelling the ground and creating mounds to eliminate slopes, have been completed along 131 kilometres (28 per cent) of the route with laying of the rail expected to start in October. A quarter of the bridge works have been completed.

CRBC promised the cement makers increased consumption of the building material in coming months as the project enters critical stages.

Data from the Kenya National Bureau of Statistics shows that cement consumption has risen by 13 per cent in the first four months of the year to April compared to a similar period last year.

Production over the same period has gone up by 10 per cent indicating increased absorption of the excess capacity of the six local manufacturers.

Cement makers have been expanding their capacities in anticipation of increased business from ongoing heavy infrastructure projects, including the Lapsset.