Economy

MPs reject locking out of foreign contractors

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Mr Rigathi Gachagua, the sponsor of the Bill. FILE PHOTO | NMG

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Summary

  • Rigathi Gachagua wanted the limitation to promote local industries with the external firms only getting tenders if Kenyan firms lacked capacity.
  • Kenya has become an attractive destination for foreign contractors in recent years, especially those from China who have bagged many road and construction jobs.
  • He further wanted the amendment to prescribe a stiff penalty for people registering firms on behalf of non-Kenyans eyeing tenders within the threshold.

A parliamentary committee has slammed the brakes on a bill that sought to stop foreign firms from taking part in public tenders below Sh1 billion and jobs Kenyans can do.

The National Assembly’s Finance and National Planning committee has rejected the bill sponsored by Mathira MP Rigathi Gachagua that proposed changes to the procurement law.

Mr Gachagua wanted the limitation to promote local industries with the external firms only getting tenders if Kenyan firms lacked capacity.

Kenya has become an attractive destination for foreign contractors in recent years, especially those from China who have bagged many road and construction jobs.

He further wanted the amendment to prescribe a stiff penalty for people registering firms on behalf of non-Kenyans eyeing tenders within the threshold.

“The committee observed that the Public Procurement and Asset Disposal (Amendment) Bill may present challenges in implementation as there may be limited local capacity to provide goods, works and services as envisioned by the sponsor of the bill,” said the committee chair and Ainamoi MP Joseph Limo in the report to the House dated March 11, 2020.

In rejecting the proposals, the committee further argued some contracts below Sh1 billon may require specialised capacity that may not be locally available.

“For instance, printing of ballot paper in a by-election would cost less than Sh1 billion, however, due to the sensitivity of printing the same locally, the contracts can only be executed by a foreign company so as to safeguard the integrity of the election,” said the committee.

“The committee recommends that having considered the bill, clause by clause and based on its observations, proposes to the House that the bill be deleted in its entirety,” Mr Limo said.

The committee further rejected proposals by Roads and Civil Engineering Contractors Association, Energy Sector Contractors Association and Michael Olunja who submitted amendments by way of memorandum.

Energy Sector Contractors Association proposed that the Act be amended to ensure that all materials, goods and services to be used in any procurement which are available locally be sourced exclusively from suppliers in Kenya.

Roads and Civil Engineering Contractors Association wanted any procurement of less than Sh3 billion in respect of any infrastructure project be tendered and awarded to a local firm.