Scandals mar dream of Konza technopolis

The construction of the Konza technology city has had many false starts and, after what seemed to be a take-off, the allegation of fraud in land acquisition has players asking whether the technopolis is doomed to fail.

Allegations of procurement fraud made against government officials by the Criminal Investigations Department are only the latest blemish to mar the dream of the Konza Technopolis.

In a letter dated April 22 to the Director of Public Prosecutions, the Criminal Investigations Department recommended the arrest of Machakos Senator Johnstone Muthama and former Information Permanent Secretary Bitange Ndemo on charges of corruption.

The two are among seven people the CID want brought to book on similar allegations, including Law Society of Kenya chairman Eric Mutua.

These latest allegations revive a corruption scandal that came to light in 2009, when the government first acquired the 5,000-acre piece of land on which Konza is expected to sit. 

STENCH OF SCANDAL

At the time, the former shareholders of the Malili Ranch Company accused their directors of duping them in the sale.

Following the conclusion of court cases on the dispute, the government attempted to clear the stench of scandal from the project in a public relations move that saw them rechristen the project Konza Technology City from Malili.

However, five years on, Konza has not quite taken off and the spectre of scandal and wrangles among stakeholders continues to haunt the project.

It remains to be seen how these fresh complications will affect investors, some of whom are multinationals that can ill-afford to have their reputations tainted by association with corruption, suspected or proved.

The Konza Technopolis Development Authority is the body tasked with steering the project. In an interview last week, the Authority’s chief executive, Dr Catherine Adeya, said that none of the companies that had expressed interest seemed affected by fraud allegations.

“None of the 345 potential investors have expressed concern about this. We are progressing with the plans as scheduled,” said Dr Adeya.

SOME INVESTORS WARY

But perhaps not all investors are quite so mellow. Nairobi Hospital, one of the investors that had indicated it would put money into the Konza Technopolis, has already shifted its attention elsewhere.

The health-care provider now plans to set up a 200-bed-capacity hospital at another city that is planned in Machakos.

“What all of this means is further delay and, where there are disputes, the process cannot be clean. It is a bad omen because people will hold back,” said Nairobi Hospital chief executive officer Cleopas Mailu.

Wananchi Group, another firm that had expressed interest in developing Konza, said that it was still “evaluating the business opportunities” in Konza to see “if they make sense”. 

In an email to Smart Company, the firm said that it did not have any concrete plans and declined to comment on the fraud allegations.

Dr Adeya said that KOTDA is proceeding with construction plans.

SPECIAL ECONOMIC ZONES

Currently, the University of Nairobi is carrying out a survey to pave the way for infrastructure and utility firms to begin work.

The Authority estimates that construction will begin in June.

Other developments in Machakos County could potentially threaten the tech city’s ability to attract investors if further delays are recorded.

Taking advantage of his county’s land resources, Machakos Governor Dr Alfred Mutua is in the process of allocating parcels of land to investors who are expected to help set up the New Machakos City. 

In addition to Dr Mutua’s planned city, Chinese investors have indicated that they will construct a Sh65 billion city modelled after the United Arab Emirates’ Dubai.

The Chinese want to take advantage of provisions in the country’s development blueprint Vision 2030 for the creation of special economic zones in Kenya that will include agricultural, industrial and technology parks.

“Investors will most likely put their money in whichever project fits their plans best,” said Mr Mailu.