Economy

Youth firms to be exempted from building agency fees

construction

Workers at a construction site. FILE PHOTO | NMG

Startups owned by the youth, women and physically disabled persons will be exempted from paying a registration fee of less than Sh15,000 to the National Construction Authority (NCA) if MPs adopt proposed changes to the law.

The National Construction (Amendment) Bill, 2022 seeks to exempt the startups under the three groups in a bid to cut their costs and boost their efforts to get State and county jobs.

Contractors pay a registration fee that ranges from Sh5,000 to Sh50,000, a charge that is seen as prohibitive to startups, prompting the proposed law to exempt the youth, women and physically disabled persons.

“The amendment seeks to provide for the recognition of women, youth and persons living with disabilities as marginalized groups and cushion them from the burden of paying the registration fee,” Nakuru Town East MP, David Gikaria, sponsor of the Bill says in a memorandum.

The targeted startups range from those involved in constructing roads and buildings, installing solar systems, telecommunications sector, plumbing and installation of Security Surveillance Systems among others.

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The legislator reckons that there is a need to reduce the costs of the three groups in a bid to help them clinch government tenders.

Registration of contractors is a key plank that the NCA relies on to weed out rogue contractors in a bid to ensure the safety and quality of buildings, roads and other structural works that they deliver.

Renewal of the licenses which is done annually costs between Sh5,000 to Sh10,000, adding to the high business costs for the contractors.

Contractors found practising without a valid license risk a fine of up to Sh1 million or three years in jail or both.

The proposed changes to the law offer the government another opportunity to open up business opportunities for startups owned by the youth, women and persons with disabilities.

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Ministries, State departments and agencies are under the law required to allocate at least 30 per cent of their tenders to the youth, women and persons with disabilities— three categories that are classified as marginalised.

The legal requirement has been in place since 2013 as the government sought to open up the business space to marginalised groups.

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