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March 24, 2018

New economic order for Kenya


When the standard gauge railway is launched on June 1, ahead of schedule, it shall be the herald of a basket of unprecedented socioeconomic benefits for Kenya and the region.

There is the obvious improvement in the transportation of people and goods between the Port of Mombasa and its hinterland. This will reduce the cost of doing business, and the price of goods and services. But most importantly, the SGR promises to spawn new industries and businesses along the Corridor, creating jobs.

Already, through on-the-job training, technological transfer and institutionalised learning, China Road and Bridge Company, the contractor for the SGR, is preparing the next generation of Kenyan railway workers.

Formally, some 60 students are currently undergoing a four-year undergraduate course in railway engineering at Beijing Jiaotong University. Next year, CRBC plans to send a third batch of 40 students.

Locally, 767 students are enrolled at the Railway Training Institute. They include 102 local students who graduated in July 2016 and 665 currently in session. This training will eventually cover all the estimated 3,000 staff who will be required to operate and maintain the SGR in seven years.

This will ensure that Kenya has a well-trained pool of personnel that can operate and maintain the SGR.

 During construction, the SGR has become the biggest employer outside government. Some 12,932 staff were on site as at the end of last month. A significant 11,004 of these are Kenyans, making up 85.1 per cent of the workforce. Some 1,928 are Chinese managerial and technical personnel.

The Kenyan contingent includes 556 managerial staff, 3,505 technicians and 6,943 general workers. Managers and technical personnel make up 36.9 per cent of the local staff. When you factor in the 5,393 workers employed by local sub-contractors and 3,096 engaged by suppliers, including 1,339 local security personnel and 21,811 workers who have since left, the SGR project has created more than 42,000 jobs.

A critical component of the contract between CRBC and the government is what is called the local content requirement. This clause requires that a certain quantum of local inputs, in terms of goods and services, is used on the project, to build local capacity and benefit host communities.

The CRBC has actively sought and procured a sizeable portion of its inputs from Kenyan businesses. We have implemented a policy that gives first consideration to local raw materials, where they are available and meet the necessary specifications.

We have signed business pacts with 934 materials and equipment suppliers and service providers. We have also cultivated relationships with at least 249 local sub-contractors. When you plug in the multiplier effect, this has been tremendous in creating and fortifying jobs, while at the same time boosting supply chains.

By the end of February, local content equivalent to a couple of billion of shillings had been implemented, representing a substantial percentage of the target amount. The biggest beneficiaries include leading cement manufacturers, fuel vendors, timber merchants and steel manufacturers.

As the project enters the next phase, more local suppliers and sub-contractors are expected to benefit in a win-win proposition. We see opportunities in the building of the next phase and the establishment of ancillary industries along the corridor. These include the revamped dry port at Embakasi and the proposed Special Economic Zone in Naivasha, among others.

The CRBC is currently implementing the integrated commissioning and acceptance inspection stage ahead of commissioning. We are greatly honoured to have been tapped to execute a project of such grand ambition and scale, not just for Kenya, but the region as a whole.

We look with pride at what has been achieved in the first such green-field project here since the Kenya-Uganda Railway of the late 1890s and early 1900s.

But the value of this project lies beyond the enormity of the iconic structural infrastructure that it has assembled. The SGR has been a driver of opportunity for Kenyans at various levels; as individuals, communities and corporates.

This landmark project is a child of active cooperation between Kenya and China. The SGR has bolstered age-old socioeconomic contact between these two countries and given it an enduring, sustainable symbol.

No image represents this dynamic better than that of a Kenyan CRBC employee cooperatively working alongside his Chinese counterpart, and in the process gained from a pool of experience, technical know-how and technology.

The skills acquired, some very precise and technical, will be useful to them and the country for posterity.




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