Why Chinese firms are elbowing out foreign rivals in road construction



The firms will pocket a cool Sh63 billion of a possible Sh90.6 billion when they complete the projects. The balance will be shared between three European contractors and one Indian contractor. Kenya will have the crumbs that are maintenance and supervision. And, even those are not guaranteed. This year when the Government advertised for construction of three roads, China Wu Yi Co Ltd – was awarded all the contracts worth Sh23.3 billion. The deal will see the firm build Molo-Olenguruone Road, Gichuru-Rironi and Tala Kenol roads. Interestingly, all the projects funded by the Government were awarded to Chinese firms. The same was with projects jointly funded by the Government and the African Development Bank (ADB). This is despite the fact that the Jubilee administration has drafted a policy that makes it mandatory for at least 30 per cent of all Government tenders to be given to locals. The 30 per cent, it seems, does not include massive infrastructural projects. See also: KWS finally agrees to give land for Nairobi’ southern bypass Local contractors that we spoke to but declined to be named for fear of victimisation during the award of future contracts, complain that they have been left out as Chinese firms take the lion’s share. They say it’s a matter of time before local contractors exit the scene. From KeNHA’s list, all projects funded by the European Union (EU) and the Government went to EU-based contractors including Gulsaan Insaat of Turkey and Impressa Maltauro of Italy. Do not have the muscle As China’s presence is felt in the country, the Anglo-American presence is slowly but surely being obliterated. But, chillingly, even Kenyan presence is being swept to the spectators’ line. According to KeNHA, although it would have been desirable for Kenyan contractors to undertake the multi-billion shilling projects, they simply do not have the muscle. KeNHA corporate affairs manager Charles Njogu, says most local contractors do not have the financial and technical muscle to complete such extensive projects. But he is quick to add that local firms are given the maintenance contracts.
Read more at: http://www.standardmedia.co.ke/business/article/2000183220/why-chinese-firms-are-elbowing-out-foreign-rivals-in-road-construction

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