By Cedric Lumiti

NAIROBI, KENYA - A leading player in the construction industry has appealed to governments in the Eastern Africa region against awarding major construction contracts to Chinese companies at the expense of local ones.
Spencon CEO, Mr, Boniface Kamau has said this is the only way the various governments will help build local capacity for construction companies.

The company will therefore mobilize other members of the Kenya Association of Building and Civil Engineering Contractors (KABCEC) alongside their colleagues in other countries to petition their governments on the need to give local construction companies a good fraction of public contracts.

His appeal comes in the wake of an influx of Chinese construction firms that have taken the region by storm taking advantage of the lately robust construction sector at the expense of local players.
"There is every need to lobby governments in the region to consider giving priority to local companies when it comes to local contracts. Building local capacity is very critical if the region is to develop," said Kamau.

In an exclusive interview with the East African Business Week, the CEO said huge contracts in the recent times had been allocated to Chinese companies and other international firms whose assurance of standards was yet to be established.
In the event, local player have to content with undue competition at a time when they should be allocated the contracts to build strong local capacity.

Chinese construction firms have been preferred against local ones given their comparatively low bidding prices, a fact Kamau says is working against the local ones.
He said most of the Chinese firms are send on trials by the government thus are not keen on the bidding price at a time when local firms have to put into consideration all the expenses associated with such tenders.
Governments have therefore been challenged to enforce a demand for 30 per cent local firm participation in all huge contracts involving foreign firms.

He said the Chinese companies must also be compelled to buy and use locally produced raw materials, engage local labour to create employment and involve local communities in projects that directly affect them.
"There are situations whereby these Chinese firms come along with all the raw materials required for local contracts. This means locally produced raw construction materials are subjected to unfair competition. In some cases, prisoners have had to be ferried from china to undertake construction jobs here in Kenya. This poses a question to whether there is no local labour in the country," he said.

The construction industry in the region is currently witnessing a boom with both public and private sector upbeat on new projects.
The construction boom is in line with the growth most of the countries are currently undergoing with Kenya's standing at 7 per cent currently and a regional average of 5.8 per cent.
The economic growth is touted by analysts to continue especially with most countries adopting prudent macro economic management policies aimed at development.

There was a recent outcry from the EAC region on the exact position of cement factories on the capacity to handle the huge construction works currently ongoing. Regional largest cement producer Bamburi Cement admitted to an acute shortage of the critical component casting doubt on local cement manufacturing capacity.

A case in point is in Kenya where the construction works at the Jomo Kenyatta International Airport (JKIA) are running behind schedule following cement supply constraints. Bamburi cement was given the monopoly to supply the huge contract.

Most of the countries in the regional are keen on improving and maintaining the tainted infrastructure with giant budgetary allocations being made to the construction sector.
This is the opportunity local construction companies are keen on tapping.
Also cited by the CEO were the weak laws in the region to contain runaway cases of cowboy contractor. They have been blamed on projects that are built in haphazard ways therefore not living to their expectations in quality and durability.
"The laws governing issuance of contracts in the region are weak making cowboy contractors thrive at the expense of development. There needs to be strong legislation to govern this," he said.

Spencon is one of the largest construction companies in the region with operations in over six countries.

The company started over 28 years ago has in the year build relationship with donor organizations and multinational companies that have seen it involved in construction works of roads, buildings, water and sewerage services among other infrastructure related chores.

It is currently present in Tanzania, Uganda, Zambia, Malawi, Mozambique, Southern Sudan and headquartered in Nairobi Kenya. It is optimistic of starting operations in DR Congo in the near future.

Source: East African Business Week Ltd.
Monday, 15 October 2007