Kenyan firms see US$235m in procurements with Chinese rail project

Want China Times, Xinhua 2015-07-17

A military unit inspects the Mombasa-Nairobi railway, January 2014. (File photo/
Xinhua)

China Road and Bridge Corporation (CRBC) has purchased US$235 million worth of goods and services from Kenyan manufacturers for the construction of a standard gauge railway (SGR), a Kenyan official said on Tuesday.

Cabinet secretary in the Ministry of Industrialization and Enterprise Development Adan Mohamed told a media briefing in Nairobi that the locally-sourced goods are part of the 40% minimum quota for Kenyan firms.

"Construction of the 487 kilometer railway has roped in 36 local subcontractors and 300 suppliers who are playing a key role in ensuring the project is completed by the end of 2017," Mohamed said during a meeting with representatives of Kenyan manufacturers.

Mohamed said that the project will be instrumental in increasing the quality of goods manufactured locally.

He added that when construction of the railway started, Kenya did not have the technology to produce the quality of cement required for SGR project and so the CRBC was forced to import 6,000 metric tons of cement.

"However, as a result of skills transfer, the local cement industry is now able to supply the CRBC with the cement," he said.

CRBC has employed 15,000 people in the US$3.8 billion railway project. Many employees are from coastal counties and more than 20% are women.

The jobs are expected to peak at 30,000 with 400 beneficiaries of the technology transfer. The company plans to transfer technical skills to 1.6% of the project workforce which will be reduced to 1.3% by the end of the venture.

Mohamed said that before construction of the SGR began, all stakeholders agreed on a list of equipments and goods that would be imported as they are not locally available in the country.

"However, we will review the list as Kenya attains the technology to produce more goods," he said.

According to the ministry of industrialization, the Chinese funded SGR is a very important project in the country as it will help to address the high cost of manufacturing.

The government intends to hold quarterly review of the local manufacturers input into the SGR.

Mohamed said this move will help to promote local producers as well as boost capacity for local production of quality supplies.