President Kenyatta last week signed a $1.5 billion (Sh153 billion) loan with China to extend the railway line from Nairobi to Naivasha. PHOTO | FILE
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President Uhuru Kenyatta says the China Road and Bridge Corporation (CRBC) has not allocated contracts equivalent to 40 per cent of the works done on the Sh327 billion standard gauge railway (SGR).
President Uhuru Kenyatta has faulted a Chinese contractor building the new Mombasa-Nairobi railway for failure to offer agreed contracts to Kenyan firms.
The President said that China Road and Bridge Corporation (CRBC) has not allocated contracts equivalent to 40 per cent of the works done on the Sh327 billion standard gauge railway (SGR).
“The President is concerned that the construction company has not met its local content obligations, and he made it clear that they must work to the target of 40 per cent,” said a statement from State House.
The Chinese contractor, like other foreign contractors undertaking public works, is required to allocate nearly half of the tenders to Kenyan investors to lift earnings of local firms, transfer skills and ease unemployment.
Kenya Railway Corporation (KRC) managing director Atanas Maina on Monday said local steel firms were struggling to supply metal required by CRBC.
“Some local steel firms are not able to meet the standards required for the new rail,” said Mr Maina in a phone interview.
“We are working to upgrade their standards as we did with the cement people because we cannot downgrade the supply requirements.”
Kenyan cement producers had initially complained they are being left out of the mega rail project.
The SGR project is Kenya’s biggest investment in infrastructure since Independence. The railway requires one million tonnes of cement, according to a master list of supplies that the manufacturers’ association says it received from CRBC.
The Export-Import Bank of China is funding 90 per cent of the railroad, which will connect Nairobi to Mombasa. It’s scheduled to be completed by 2017. The State House said that 60 per cent of the work is complete.
President Kenyatta last week signed a $1.5 billion (Sh153 billion) loan with China to extend the railway line from Nairobi to Naivasha, which will host an industrial park to be set up by Chinese firms.
“Separate agreement will be negotiated with the contractor to allow for a minimum of 40 per cent local content of the overall cost of the project,” said Mr Maina in regards to the Naivasha line whose construction is expected to start by December 2016.
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