•The legislative proposal which was adopted by the Committee is set to be published for consideration by the Bill.
•In the 2021 decision the committee argued that the proposed Sh20billion at the time was way above the potential of a majority of Kenyan companies.
Image: /NDICHU WAINAINA
Foreign investors will soon be restricted to tenders above Sh1 billion after the National Assembly's Finance and National Planning adopted proposed amendments on the Public Procurement and Asset Disposal Act.
This will be the second attempt in three years that MPs are trying to lock out foreign from lower value state tenders.
In 2021 the Finance committee rejected a Bill that sought to enhance the limits of tenders where Kenyan citizens are given exclusive preference from the current Sh500 million.
In the decision the committee argued that the proposed Sh20billion at the time was way above the potential of a majority of Kenyan companies.
The latest push is meant to amend the Act to restrict foreigners to tenders above Sh1 billion alongside setting new regulations for foreign inverters who undertake any tenders in the country.
The amendments sponsored by Kiambaa legislator John Njuguna notes that there is need to prescribe the threshold of procurements that shall be awarded to local firms to promote growth of local industries.
“My proposal is driven by an interest to protect our local contractors, their businesses and our economy," he said
Njuguna said he had done a survey across Africa and in countries like South Africa local players are protected against international players.
"It does not help that when these international contractors get these works, the profits are ploughed back to their host countries, so we lose out”, he told the Committee.
Njuguna said local contractors have missed out on opportunities to develop capacity for large contracts as the threshold set for such works is way out of their reach and favours their international counterparts.
He said it was time for allow local contractors to grow their businesses to the stature of their international counterparts that have been bagging most contracts that are worth Sh1 billion and above.
The proposed Public Procurement and Asset Disposal (Amendment) Bill, 2023, further prescribes a penalty for any person who registers a firm on behalf of a non-Kenyan for purposes of benefiting for a procurement that falls within a prescribed threshold.
During the meeting chaired by Kitui Rural MP, David Mboni, committee members while welcoming the move cautioned that unscrupulous businessmen could take advantage and front local players as directors while withholding the actual ownership of companies
They said the proposals should be evaluated alongside the previous suggestion that had set the threshold for awarding local contracts at Sh5 billion.
Once the Bill is published, the Committee has the second opportunity to re-examine the same legislative proposal and invite comments from the public.