Konza City consultancy in talks over Sh1.7bn payment

What you need to know:

The ICT ministry wants to agree with Tetra Tech Inc on a phased payment depending on the work completed.
The firm beat five bidders in June last year to secure the job.
However, it is yet to start work after the project was allocated only Sh773 million in the current financial year.

The US company that won a contract to oversee construction of Konza City is holding talks with the government over how it will be paid Sh1.7 billion, one of the issues holding back the project.

The ICT ministry wants to agree with Tetra Tech Inc on a phased payment depending on the work completed. The firm beat five bidders in June last year to secure the job.

However, it is yet to start work after the project was allocated only Sh773 million in the current financial year. Phase one requires Sh64 billion.

“We have started negotiations with Tetra Tech on the mode of payment where we are seeking to pay them in instalments. We anticipate that this process will be concluded in coming months,” ICT Principal Secretary Joseph Tiampati said on Friday.

The contract includes land lease negotiations with investors and overseas firms that will lay infrastructure such as power, roads and sewerage on a 5,000-acre land as well as marketing.

Financial analysis

The firm will also carry out financial analysis and conduct due diligence of investors to be awarded stakes in the technopolis.

This comes as the ICT ministry is seeking Sh3.7 billion from the Treasury in the next financial year, meaning the work could be started in the second half of the year.

READ: Building of Konza city tied to approval of Sh3.7bn budget

The US firm was initially expected to start work in December and guide the first phase of the multi-billion- shilling project whose timeline had been planned from 2013 to 2017.

The project has, however, fallen behind schedule because of delays in passing laws needed to enter into contractual obligations with financiers.

The draft KOTDA (Konza Technopolis Development Authority) Bill is currently with the Attorney-General and is expected to go to the Cabinet for approval before it is tabled for debate in the National Assembly.

The legislation is expected to institutionalise the authority as a legal entity with the power to enter into contractual obligations, including fundraising for the initial phase of the project.

Konza technopolis is one of the flagship projects of the Vision 2030 development blueprint meant to position Kenya as East Africa’s ICT hub.