02/05/2023
HOW CAN OUR local contractors compete with the Chinese contractors state sponsored capitalism through EXIM bank? Isn’t time the construction industry came up with a bank that understands its needs? We can’t whine forever…
1. Our government invariable award, of literally, all major infrastructure projects to Chinese contractors has not only been a concern to the construction industry players but largely Kenyans in general.
2. In addition, the inclination of the private developers towards Chinese contractors especially on mega projects is alarming considering the number of local contractors registered by NCA. Why are we shying away from awarding mega projects to local contractors?
3. Of course the most flimsy excuse you will hear is that there is lack of capacity - NONSENSE! Even by law, NCA has registered NCA 1 local contractors who are categorized to do infinite contract value projects. When did the meaning of the word ‘infinite’ change?
4. The government’s policy that spans from Kibaki era, of awarding mega projects to Chinese contractors is one I would restrain from discussing - for now. But anyone who understands this industry will agree with me that above everything else, the presence of the Chinese EXIM bank has been the chasm difference.
5. The bank has been used to advance China’s strategic interests here in Kenya and across Africa. How can our local contractors compete against such state sponsored capitalism? I’m not making light of our local contractors project delivery challenges but even that, you’ll agree, can be addressed if you had financial muscle like the Chinese do.
6. It’s in the sunlight that most of our local contractors lack the financial capital, equipment and man power to deliver mega infrastructure projects. While you find that a local contractor requires advance payment to start work, the Chinese would in fact go for months without pay.
7. Our financial institutions, I posit, haven’t comprehensively understood this industry; to date. The struggles and the stringent rules our local contagion through to access credit facilities is a key contributor to the growth stagnation of our local contractors.
8. We need a bank that remarkably understands the local construction challenges and needs. The local contractors for instance must quickly group and have this discussion. Start even with a Sacco, there are tens of thousands of local contractors - it’s possible.
9. Thinking outside the box is the sure route to compete with Chinese contractors. Get out of the straitjacket, mainstream thinking, it’s not working. Don’t look at the policy makers, they are much driven by who can be able to give upfront kickbacks easily. We are on your own folks…
10. The implementation of 30% rule on projects awarded to foreign contractors cannot be the only way to benefit from mega projects by local contractors, No! Let’s think about a CONSTRUCTION BANK…. It won’t change overnight, but it can.
