INVESTING IN THE CONSTRUCTION INDUSTRY FOR BEGINNERS

Sometime last month the state threatened to reject road construction bids from local contractors and instead give the tenders to foreign firms.Ask a number of people what they think about this and they’ll give you an example of a road ‘next door’.

Apparently there are even roads that have been under construction for more than three years and are yet to be completed .Let’s not forget the roads that are worked on this week and a month later the potholes are way worse than the previous ones.
So far chinese firms have scooped more than 75% of the lucrative government contract jobs.

Normally the main question is,if  National Construction  Authority exists to offer capacity building and accreditation to contractors then why are foreign contractors still preferred for major government projects to local ones?
Image result for CONSTRUCTION AUTHORITIES OF KENYA

Sometimes the contractors are just people who have the money to do the work but lack technical training.
What with the unskilled fundis who learn on the job and quack contractors.

Theres also lack of mechanization facilities that can complete the job.Not forgetting the erratic change of prices of building materials and the need to research on easily available raw materials in various regions in the country
There are competent professionals who offer good quality advice and service, but some give poor services

Acces to credit to do the work sometime becomes an issue and the project might be midway

Bidding highly for personal gains.A good  example is where a foreigner may bid to do a job for ksh20 million and a local bids for the same job at  ksh30 million. ofcourse you’d like to give the job to the local but the quote is questionable so when asked the reasons for the 30 million its realised its more for personal gains.

Sometimes  contractors will file a case aginst the employer for funding issues

What is the authority doing or planning to do to increase the number of local contractors who get jobs?
Accreditation and registration of contractors and reguImage result for CONSTRUCTION ENTREPRENEURlation of  their professional undertakings”.

Availing machinery and equipement

Creation of a fund for contractors to reduce shortage of funding

Create a set of rules for contractors in regards to increasing number of professionals & encourage discipline in the industry.

So where exactly do I come in as an investor?
You could offer training for contractors & construction workforce
As a move to weed out rogue contractors,you could train construction fundis and reduce the amount of malpractices that have seen the collapse of buildings, poor workmanship and delay in completion of projects

Partner with the authority in leasing out construction machinery at affordable rates

Invest in the authorities fund that will create loans to contractors so that they can do the work well

There’s an institution by the name Kenya Institute of Highways and Building Technology (KIHBT) this institution has partnered with the ministry of infrastructure to offer training to entrepreneurs who want to know more about construction as a profession and an investment area.
Taking into consideration  the different sectors in the ministry from Roads,UrbanAirports,Railways,ports,police housing,slum upgrading ,development of Nairobi metropolitan,Construction of power generation plants, construction of the proposed multi-billion shilling Konza ICT Park and construction of resort cities.

All this  require money for creating  designs, planning , construction &  maintenance.So apart from construction of residential, commercial and industrial buildings.There’s alot more Investors can do ,including manufacturing and supply of construction materials and components for the sector

How do I access the opportunities?
The projects are normally advertised on the agencies websites or the IFMIS portal.you could apply for the tenders or even visit the ministry to get more information

What are the advantages of partnering with the ministry?
The ministry provides machinery at affordable rates and have a material & Testing divison that ensures quality work

There’s always the question of existence of corruption  in the awarding of construction tenders and the high requirements of technical qualification required during the process.issues that need to be discussed to accommodate beginners in the industry.

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