Chinese firm procures $235m from local contractors

NAIROBI - China Railway and Bridge Corporation (CRBC) has so far purchased $235 million worth of goods and services from local manufacturers for the construction of the standard gauge railway, 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 percent minimum requirement reserved 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 end of 2017," Mohamed said during a meeting with representatives of Kenyan manufacturers.

So far the railway has consumed a total of $235 million from local sources.

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 $3.8 billion railway project. Many employees are from coastal counties and more than 20 percent 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 percent of the project workforce which will reduce to 1.3 percent at the end of the venture.

Mohamed noted 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.

According to the CS, this move will help to promote local producers as well as boost capacity for local production of quality supplies.