Kenya: local firms to reap Sh60 billion from SGR Phase II

12 September 2017

Local companies in JV agreements with a Chinese company constructing the 120-km Nairobi-Naivasha Standard Gauge Railway (SGR) are expected to rake in up to Sh60 billion.

National Construction Authority (NCA) executive director Daniel Manduku said the main contractor, China Road and Bridge Construction (CRBC), had forwarded a list of sub-contractors it entered JV agreements with for the Sh153 billion project.

The construction will see Nairobi connected to Ol Karia geothermal fields through a railway line traversing Nairobi, Kajiado, Narok and Nakuru counties.

“The contractor has gone beyond our 30% cost allocation threshold for local contractor involvement and this is the best way to enhance capacity of local contractors to handle large contracts as well as help Kenyan workers gain the much-needed experience in handling big projects,” he said.

Speaking on the sidelines of the fifth International LafargeHolcim Awards for the Middle East and Africa media briefing ceremony in Nairobi, Dr Manduku said another 40 Kenyan contractors had also benefitted from the 30% share of local projects’ currently being implemented by foreign firms, mostly China.

Some of the projects include commercial and residential high-rise buildings in Nairobi as well as ongoing infrastructure projects in various parts of the country.

“NCA is strictly following up on all multibillion-shilling projects to ensure foreign companies incorporate local firms in executing them.”

NCA has warned public and private firms against awarding contracts to foreign companies without local input.

Dr Manduku said the NCA would not licence any foreign contractors to undertake any project before providing details on their JV agreements with local contractors.

The NCA also warned foreign companies undertaking local projects against signing new projects saying licences issued were specifically for the projects that allowed them to operate in the country.

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