Overlook contract sharing rule at your own peril, foreigners told

The construction industry regulator has warned foreign companies against ignoring new regulations requiring them to set aside at least 30 per cent of their work to their local counterparts.

The rules, gazetted by Lands Cabinet Secretary Charity Ngilu in June, are meant to level the playing field in the fast-developing industry after local contractors complained of being sidelined in the award of big tenders.

National Construction Authority chairman Steve Oundo told foreign firms at a consultative forum on Tuesday that they had no choice but to abide by the regulations for them to continue operating in the country.

“The idea is to bring in fair competition in the industry and ensure there is a skills transfer from the big firms to local contracts in the long run,” Mr Oundo said.

Foreign contractors are also required, under the new regime, to employ local staff in both managerial and technical positions and provide evidence of how they will transfer skills to their local partners.

CONSTRUCTION BUSINESS

The regulations also stipulate that foreign firms can only be registered in the country to undertake a specific project, upon completion of which it should not engage in any construction business.

“Foreign firms must lodge an affidavit with the board to the effect that once the contract works are completed and the period of defects, liability or maintenance has elapsed, it shall not engage in construction business in Kenya,” the regulations read.

NCA defines a foreign contractor as any firm whose 51 per cent or more shareholding is held by a non-Kenyan, or one which is incorporated outside Kenya.

Currently, the authority has 25,000 registered local contractors and 60 foreign firms in its database.

The warning comes barely a week after the Ministry of Transport and Infrastructure shortlisted contractors for road tenders in the first phase of the State annuity financing programme. The list was dominated by Chinese companies.