Konza technology city comes with mixed bag of fortunes

They started to arrive in tens, then hundreds, and by the time President Kibaki’s motorcade snaked its way to the site for East Africa’s first smart city, scores of people from nearby villages had thronged the venue.

This was last Wednesday as a colourful sea of humanity gathered at the open scrubland located 60km east of Nairobi “to receive development” from top State officials.

“The government has decided to place this project fully be in the hands of people living in this area under a board (of Konza Tecnolopolis Development Authority) chaired by John Ngumi,” Information minister Samuel Poghisio told cheering residents during the groundbreaking ceremony last week.

The expectation was almost palpable as residents who had turned up openly pondered the tidings that a Sh850 billion technology city would bring to this sun-baked rangeland of Ukambani, better known for its perennial water shortage.

The Konza city is conceived to be a beacon of excellence in the league of Egypt’s Smart Village, Mauritius’ Ebene Cyber City or even US’s Silicon Valley where innovative minds interact with financiers to transform ideas into global products.

But as government officials took turns to claim credit for initiating what could be Africa’s best example of how knowledge economy would drive continent’s growth in the coming years, the residents celebrated its brick and mortar aspect.

“For the first time in history, a city is coming up between Machakos, Makueni and Kajiado counties,” Catholic Diocese of Machakos Bishop Martin Kivuva summarised the mood shortly after President Kibaki flagged off the heavy machinery at the site.

From casual interviews with ordinary residents at the event, the understanding of this multi-billion shillings project was as diverse as were their ages and social backgrounds.

Some were attracted to the scene by sheer opulence of big government — top of the range cars, clattering Kenya Air Force choppers and heavy deployment of uniformed police officers. The enterprising among them came to make quick money, selling bananas, sugarcane, mangoes, water, ice-creams and sodas.

Others, aware of the buzz this project has caused in the area, said they just wanted to go down in history as having witnessed the day this mega project got the official nod.

“We have waited for a long time but today we can say it will start and change this area, especially the Malili side where people have no source of income,” said a mason who identified himself only as Ndunda.

The mason’s eagerness was particularly understandable, coming from a man whose source of income has been drying up lately.

The National Environment Management Authority officials have of late been refusing to approve any building projects around Malili because such plans have to be aligned with Konza’s development strategy, he disclosed.

“The vast fallow lands you see around this site belong to individuals who want to put up residential buildings. Come back five years from now and you will be surprised at how this project is going to change this area,” said Mr Ndunda.

Generally, the expectation of most ordinary residents who spoke to the Business Daily appeared to be shaped by experiences of nearby towns of Athi River and Kitengela — some 30km on the way back to Nairobi.

The real estate boom and industries have spurred growth of the two towns in the past two decades.

In Athi River, several limestone quarries as well as industries such as Bamburi Cement, Athi River Steel Plant, ISL Steel Manufacturing, Savanna Cement and Kenya Meat Commission have attracted thousands of semi-skilled workers to the town.

In Kitengela, about six kilometres deeper south, thousands more jobs for semi-skilled workers have been created in export processing zones, cement firms such as East African Port Land Cement and the booming real estate segment.

The Export Processing Zones Authority estimates that companies within the town discharge Sh300 million every year to suppliers of goods and services that have sprung up since its establishment.

Residents of counties bordering the Konza City believe a similar micro-economy will crop up, benefiting those in the informal sector as well.

“Water from the project will also serve the community, helping to eliminate perennial food shortage in the area,” said Akamba Council of Elders chairman Simon Mumbi.

When these and other expectations finally converge with reality, Konza may represent a new front in the never-ending war between man and technology.

Technology caused massive layoffs in early 1990s as firms automated their services. Later in early 2000s, when just a few Kenyans owned mobile handsets, technology deepened the rural-urban (digital) divide.

The impression one gets from State officials is that Konza would be more of a technology park than a business hub that government has lately tried to modify it into.

As such, the city would most likely widen income inequality because technology handsomely rewards high-flying entrepreneurs and skilled workers while shunting less-educated locals to the periphery.

The government estimates that 200,000 jobs will be created by the time the project is completed in 25 years but the quality of human capital required may not be readily available within the three counties.

As is common with public projects in rural areas, tension could build up as entrepreneurs extend their hunt for best skills beyond the three counties, and possibly into the international labour market.

“Here is a concept that’s not only going to reposition Kenya in the world but will also reverse brain drain by providing quality jobs to university graduates,” Equity Bank CEO and Vision 2030 chairman James Mwangi said.

Still, the entrepreneurial vim and skills required for running business process outsourcing, software development, data and call centres — which are the hallmarks of Konza City — will have to come from outside the region.

So far, 250 entities have applied to the Ministry of Information to invest in what could be the most iconic structure ever built in Africa, PS Bitange Ndemo said.

The first signal that Konza would be a different kind of development could be gleaned from list of 15 companies that have committed to create 15,000 jobs in the first phase of the project to be completed in five years.

Only service industry players — Safaricom, Craft Silicon, Wananchi Online, Kenya Medical Research Institute, Kenya Agricultural Research Institute, the University of Nairobi, Jomo Kenyatta University of Agriculture and Technology and the Nairobi Hospital — have committed to take part.

Apart from specialised skills it requires, the short value chain of service sector is known to limit its ability to create jobs to the masses and to discharge money to surrounding community.

Similarly, the top global brands like Huawei Technologies, Samsung, Toyota, Telemac and Research In Motion which have expressed interest setting up research units in the first phase of Konza will most likely be looking for highly skilled expatriates.

(Read: Global giants line up for slice of Konza city)

To private sector players, the initial challenges pale against the benefits that would accrue to county and national governments from the project.

“We have a chance to increase our exports because getting services to international market does not need physical infrastructure or permits which are major source of non-tariff barriers,” said Kenya Private Sector Alliance chairman Patrick Obath.

The project’s benefit aside, the hype about the Konza project has already pushed up land prices with leaders from the region expressing fears that the resource poor residents could sell their plots to speculators, planting seeds for emergence of slums.

“We know that property prices have been going up around this area and many people want to sell their property but we encourage transactions to be done through Konza Co-operative Society,” said Vice-President Kalonzo Musyoka.

However, President Kibaki moved to assure residents that they would also benefit from clean drinking water meant for Konza technocity. The government has sourced funds to build a multipurpose Thwake Dam for the purpose, he said.

“The dam will also provide water for irrigation besides generating hydro-power to boost the power supply on the national grid,” he said at the ceremony.

The government also plans to build a two-lane carriageway from Athi River to Konza from January next year and be completed by 2016, he added. The project is in addition to the high speed standard gauge rail from Mombasa to Malaba-Kisumu, which incorporates the Nairobi-Konza segment.

“I would like to call upon both domestic and foreign investors to take advantage of the tremendous opportunities that Konza technology city offers,” President Kibaki said.

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