Nipate
Forum => Kenya Discussion => Topic started by: RV Pundit on June 03, 2016, 12:33:07 PM
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http://www.businessdailyafrica.com/Nairobi-Western-Bypass-set-for-construction/-/539546/3229776/-/g8s50kz/-/index.html
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http://www.businessdailyafrica.com/Nairobi-Western-Bypass-set-for-construction/-/539546/3229776/-/g8s50kz/-/index.html
The Standard wrote about this a few years ago:
Sound investment in infrastructure is a key driver of economic growth.
Countries with economies under transition spend a big percentage of development funds on the road network.
But road construction in Kenya is a major drain on our meager resources. The Kenyan taxpayer parts with Sh83 million for every kilometer of road tarmacked. In Ethiopia the same distance of road costs Sh34 million and in the Democratic Republic of Congo, it comes much cheaper at Sh20 million. This comparison is for a standard road; two lanes, seven meters wide.
Countries that have placed a premium on the development of infrastructure have recorded sustainable economic growth, culminating in more disposable incomes for their citizenry. The absence of good roads means that Kenya’s Vision 2030 will remain a pipe dream.
Dairy farmers in Nyandarua have had to pour milk because they can’t access markets. Folks die in North Eastern Kenya because of lack of food while farmers in Kitale have surplus harvest. There are no roads linking the demand and supply regions. This messy and unacceptable situation is the product of a poor road policy. The Kenyan road policy needs a fundamental and radical overhaul to free it from special interest groups that have suffocated the development of a road network across the nation.
There are many issues around road construction that Kenya has to contend with. Cash flow challenges, designer changes, inflation, erratic interest rate fluctuations as well as poor project management stand out but they are not insurmountable.
However, there are two elephants in the room; the biggest being the cost of tarmacking roads in Kenya. By its very nature, the construction industry is a cost intensive sector owing to the unavoidable variations arising from cost of inputs. But even Kenya probably has the highest cost of doing roads in sub-Saharan Africa.
In the space of supervision consultancy, Kenya takes position two in sub-Saharan Africa after Nigeria.
The average cost of rehabilitation and reconstruction supervision in Nigeria stands at Sh3 million while in Kenya it stands at Sh24 million per kilometer.
Why would it cost Sh60 million more to do a kilometer of road in Kenya compared to DR Congo? Is it not time for a deliberate study on why road construction in Kenya has been held hostage and why the costs are so high compared to our neighbours? There is a valid case for an independent judicial investigation on road construction costs in Kenya.
The second elephant in the room is the Kenyan contractor. How come Kenyan contractors who win tenders across the borders are able to do roads in neighbouring countries at one-third of the cost?
Since the buck stops at the Presidency, it is not possible that President Kenyatta would have a good night’s sleep knowing that cabals in his administration are lining their pockets with Sh60 million every time a single kilometre of road comes up!
The writer is a communications consultant who analyses business politics
http://www.standardmedia.co.ke/article/2000095442/why-our-road-construction-costs-are-obscene
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Since the buck stops at the Presidency, it is not possible that President Kenyatta would have a good night’s sleep knowing that cabals in his administration are lining their pockets with Sh60 million every time a single kilometre of road comes up!
On another thread Pundit does an excellent job demonstrating how small time corruption by cops on the beat impacts national GDP. It would be interesting to see how these numbers on infrastructure construction, which is said to constitute a substantial part of GDP(I don't have the numbers handy), pan out in a similar analysis.
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I am assuming this doesn't factor the expensive kenya land compensation payouts. If this doesn't then we are in problem. Certainly our road construction per kms I have heard is out of this world.
But road construction in Kenya is a major drain on our meager resources. The Kenyan taxpayer parts with Sh83 million for every kilometer of road tarmacked. In Ethiopia the same distance of road costs Sh34 million and in the Democratic Republic of Congo, it comes much cheaper at Sh20 million. This comparison is for a standard road; two lanes, seven meters wide.
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Govt needs to tell contractors how much it'll pay per kilometer. It must be the average for the region - Uganda, TZ, Ethiopia. A billion per km is ridicilously expensive. Unless they are using gold!!!
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Yeah, it tragic. Uhuru project to tarmac 10,000kms came a gropper when contractor quoted as much as 200M to tarmac essentially rural roads.
Since the buck stops at the Presidency, it is not possible that President Kenyatta would have a good night’s sleep knowing that cabals in his administration are lining their pockets with Sh60 million every time a single kilometre of road comes up!
On another thread Pundit does an excellent job demonstrating how small time corruption by cops on the beat impacts national GDP. It would be interesting to see how these numbers on infrastructure construction, which is said to constitute a substantial part of GDP(I don't have the numbers handy), pan out in a similar analysis.
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Ever heard of eminent domain?
Govt should use it to acquire the land.
It is for a common good. Rich countries use it all the time.
I am assuming this doesn't factor the expensive kenya land compensation payouts. If this doesn't then we are in problem. Certainly our road construction per kms I have heard is out of this world.
But road construction in Kenya is a major drain on our meager resources. The Kenyan taxpayer parts with Sh83 million for every kilometer of road tarmacked. In Ethiopia the same distance of road costs Sh34 million and in the Democratic Republic of Congo, it comes much cheaper at Sh20 million. This comparison is for a standard road; two lanes, seven meters wide.
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Yeah. It would be interesting to see the costing breakdown. Why would 4 lane road cost that much.
Govt needs to tell contractors how much it'll pay per kilometer. It must be the average for the region - Uganda, TZ, Ethiopia. A billion per km is ridicilously expensive. Unless they are using gold!!!
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Of course. What the hell do you think kenya uses. Complusory acquistion or eminent domain. The difference come in what fair compensation is. If US gov want to acquire a square foot of New York that is going to be damn expensive. The same with kenya gov. Generally land in Kenya is very expensive. Then you have folks who have legally "grabbed" land and it cost a fortune to pay them. For example Eastern by-pass they had to pay some Kiano window some billions...nearly equal to total road construction...coz they had to bring down his huge buildings.
I have no issues with land being expensive...it not within gov control...gov has to pay for fair market price for land...but constructions cost...should be pretty much less than say Uganda.
Ever heard of eminent domain?
Govt should use it to acquire the land.
It is for a common good. Rich countries use it all the time.
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I am assuming this doesn't factor the expensive kenya land compensation payouts. If this doesn't then we are in problem. Certainly our road construction per kms I have heard is out of this world.
Should have posted this along with the earlier article, as it tries to point out some of the reasons why the costs are ridiculously over inflated:
Kenya among most expensive countries in Africa to construct roads
Road construction in Kenya has become very costly, making the country one of the most expensive in Africa.
A study of 172 road infrastructure projects, published by the African Development Bank (AfDB) in May 2014, showed that the unit cost of rehabilitating a kilometre of road in urban areas of Kenya was $440,000 in 2011. In Angola, the cost of constructing a similar kilometre of road amounted to $101,600.
The Kenya Urban Roads Authority (KURA) blames these high costs on unfettered land grabbing by cartels; illegal allocation of land particularly by the (former) provincial administration and county governments; conflict of interests between various stakeholders and over-valuation of land parcels.
The cost is also increased by illegal payments made to those who have constructed buildings on road reserves; unnecessary cost of relocating power lines and other utilities and an escalation of fees owed to public agencies.
These costs have over-burdened the taxpayer as the government pays billions of shillings to either acquire plots that are on road reserves or to compensate people who have constructed buildings there.
At the same time, the government has been paying Kenya Power and water and sewerage companies millions to relocate power lines and other services.
Further costs go towards hefty legal fees for numerous court cases that lead to long delays in starting road projects.
Despite the cash paid for land acquisition and to utility companies running into millions of dollars, these payments are largely illegal. This is because the relevant land was either illegally allocated while the power lines, water and sewage systems as well as fibre optic cables were placed in locations they were not supposed to be.
Punitive laws
Worsening the situation are public agencies such as the National Environmental Management Authority (Nema) and the National Construction Company who use punitive laws to impose huge, unrealistic fees on road contractors. These fees are eventually passed on to the government.
According to Joseph N Nkadayo, the director-general of KURA, EIA fees were increased by NEMA “to 0.1 per cent of the total cost of the project without a maximum limit and with no reciprocated services against EIA fees.” In a presentation he made last year on the status of major projects, Mr Nkadayo said that on its part, the National Construction Authority charges fees amounting to one per cent of the cost of projects.
The amount spent on land acquisition is enormous. For instance, data from KURA shows that in a sample of 11 urban roads projects, the government will end up spending Ksh8.8 billion ($96 million) in land acquisition while the cost of the works will be Ksh21.6 billion ($236 million). The total cost of relocating power lines, water, sewage and other systems was estimated at Ksh1.3 billion ($14 million).
Had there been a more orderly way of placing the utilities and had the relevant authorities been better stewards of public land, the taxpayer would have been spared Ksh10 billion ($109 million) or close to 47 per cent of the cost of constructing these roads.
The biggest amount to be paid out for land acquisition is for the Meru Town bypass, at Ksh1.5 billion ($16 million); while constructing the City Cabanas Interchange in Nairobi, will cost the government Ksh1.4 billion ($15 million). Land acquisition for the expansion of Langata Road in Nairobi will cost Ksh1.1 billion ($12 million).
The biggest amount to be paid for relocation of services will be for Ngong Road between All Saints Cathedral and Adams Arcade in Nairobi at a cost of Ksh450 million ($4.9 million).
The Kenya government, through KURA, has been paying out huge amounts of money to Kenya Power, water companies and other utility companies to relocate power lines, water and sewage systems that were located too close to roads.
“The government should not be paying these companies to re-do what they were supposed to do initially,” said a KURA employee on condition of anonymity.
The high cost of making roads is made worse by the amount of money paid out as compensation to land owners. For instance, in the recent commissioning of the Outer Ring Road in Nairobi’s Eastlands area by President Uhuru Kenyatta, the cost of constructing the dual carriage way will increase by Ksh800 million ($8.7 million) while the cost of relocating systems will be Ksh300 million ($3.2 million).
According to Mr Nkadayo, these high costs are a result of plots at the Donholm roundabout “being grabbed and converted to other uses.”
In some cases, the government has paid as much as 50 per cent of the total cost of putting up a road to compensate people who have built on road reserves and to relocate different systems.
In some cases, owners have colluded with land valuers to inflate the amount of money the government needed to compensate them.
Mr Nkadayo accuses county and national authorities of illegally allocating road reserves, while “cartels” grab public land and trade in it. “Conflicting interests and policies of various stakeholders has led to downgrading of projects such as the Langata and Ngong roads from 60 metres to 45 metres wide,” said Mr Nkadayo.
Reclaiming road reserves has been challenging for KURA. Also, land valuation for government compensation has tended to be high.
More frustration for KURA and road contractors comes in the form of long drawn-out court cases, with some dragging on for years. For instance, by late last year, KURA had a record 36 cases related to encroachment on road reserves. Of these, 18 were concluded last year, 18 are ongoing while KURA has won 10 and lost eight. The claimants appealed seven of the cases while KURA appealed three.
Set up after the enactment of the Kenya Roads Act, 2007, KURA is responsible for managing, developing, rehabilitating and maintaining public roads in all counties in Kenya except national roads.
The Authority manages about 12,549km of roads and secures funding from the Roads Maintenance Levy Fund, which funds 15 per cent of KURA’s budget and from the Government of Kenya Development Fund.
KURA also gets funding from development agencies like AfDB, the European Union, the Japanese International Co-operation Agency and the World Bank.
http://www.theeastafrican.co.ke/news/Kenya-most-expensive-countries-in-Africa-to-construct-roads-/-/2558/2619524/-/item/1/-/4nqd8h/-/index.html
The eating is massive, from the very bottom all the way to the top.
EDIT: posted at the same time as @RV Pundit.
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I think we need Mumbi Ngugi to save kenyans here. It seem the problem is land acquisitions gone awry. The main reason why Uganda feared the pipeline will be expensive.
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The land around Lamu port facilities has seen speculators going there in droves. The land prices have exploded making LAPPSET a very expensive excersice.
I think we need Mumbi Ngugi to save kenyans here. It seem the problem is land acquisitions gone awry. The main reason why Uganda feared the pipeline will be expensive.
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What is the solution to this land speculation. Seem legal and constitutional.
The land around Lamu port facilities has seen speculators going there in droves. The land prices have exploded making LAPPSET a very expensive excersice.
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Why would one pay today for 10M Ksh for an acre in Lamu when the same land was going for 0.5M per acre only 4 years back?
Solution is govt sets prices and sticks to them. Even people who have built on road reserves are being compensated. They belong in the dock by interfering with public land.
I hear the bigges land compensation for SGR in Taita Taveta was the Kenyatta family. Is there not a conflict of interests?
Uhuru already made too much money with his cut in the SGR deal. Is he not satisfied or was the rest for his mum?
What is the solution to this land speculation. Seem legal and constitutional.
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This is clearly unconstitutional and gok doesn not have the last say on this. It the high court which determine the price if Gok valuation differ with owners. And normally the market price determine this.
Why would one pay today for 10M Ksh for an acre in Lamu when the same land was going for 0.5M per acre only 4 years back?
Solution is govt sets prices and sticks to them. Even people who have built on road reserves are being compensated. They belong in the dock by interfering with public land.
I hear the bigges land compensation for SGR in Taita Taveta was the Kenyatta family. Is there not a conflict of interests?
Uhuru already made too much money with his cut in the SGR deal. Is he not satisfied or was the rest for his mum?
What is the solution to this land speculation. Seem legal and constitutional.
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They should use an average of 10yrs when compensating coz people inflate as soon as they hear a road.
At this rate kenya will be very expensive to invest in 20yrs.
This is clearly unconstitutional and gok doesn not have the last say on this. It the high court which determine the price if Gok valuation differ with owners. And normally the market price determine this.
Why would one pay today for 10M Ksh for an acre in Lamu when the same land was going for 0.5M per acre only 4 years back?
Solution is govt sets prices and sticks to them. Even people who have built on road reserves are being compensated. They belong in the dock by interfering with public land.
I hear the bigges land compensation for SGR in Taita Taveta was the Kenyatta family. Is there not a conflict of interests?
Uhuru already made too much money with his cut in the SGR deal. Is he not satisfied or was the rest for his mum?
What is the solution to this land speculation. Seem legal and constitutional.
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That make sense. Parliament need to pass such a law. If it won't be unconstitutional. Certainly something need to be done on land speculators.
They should use an average of 10yrs when compensating coz people inflate as soon as they hear a road.
At this rate kenya will be very expensive to invest in 20yrs.
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That make sense. Parliament need to pass such a law. If it won't be unconstitutional. Certainly something need to be done on land speculators.
Difficult to pass such a law, even though it makes sense. Only two ways to easily make money in Kenya: steal cash from the government à la Waiguru or land.
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Yes it is difficult but the other difficult thing is paying a billion per km to construct a road.
Also why not tax every inch of land to finance building of schools?
Am against any kind of tax but will support this.
This should be managed by achool districr boards. Not national or county
That make sense. Parliament need to pass such a law. If it won't be unconstitutional. Certainly something need to be done on land speculators.
Difficult to pass such a law, even though it makes sense. Only two ways to easily make money in Kenya: steal cash from the government à la Waiguru or land.
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Yes it is difficult but the other difficult thing is paying a billion per km to construct a road.
Also why not tax every inch of land to finance building of schools?
Am against any kind of tax but will support this.
This should be managed by achool districr boards. Not national or county
The Capital Gains Tax, if properly implemented, would have gone a long way into cooling the real estate market of speculators. Unfortunately, it's too vague and confusing.
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Yeah that is all that is needed to curb this. If Gov takes 30% of every gain; then this land speculation will cease. Land is very expensive in kenya for everyone. It is out of this world.
The Capital Gains Tax, if properly implemented, would have gone a long way into cooling the real estate market of speculators. Unfortunately, it's too vague and confusing.
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Let the good times roll. An acre in kitisuru for 100mil.
Let it roll.
Even in California its not that expensive. For that kinda money you get beach property in Malibu.
Its not like China where the govt. controls the economy.
Yes it is difficult but the other difficult thing is paying a billion per km to construct a road.
Also why not tax every inch of land to finance building of schools?
Am against any kind of tax but will support this.
This should be managed by achool districr boards. Not national or county
The Capital Gains Tax, if properly implemented, would have gone a long way into cooling the real estate market of speculators. Unfortunately, it's too vague and confusing.
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That is way too high. A rural road in kenya should not even be a tenth of that amount. Surely in Western Europe that is the price going for a 4 lane highway.
Those are cartels at work. We were told the Chinese who booted out the Asian contractors would bring the prices of building roads down bit to no avail.
The most expensive item in building a road is asphalt component commonly known as tarmac in Kenya. Now these rural roads do not even have an asphalt layer of 2 cm. Now in Western Europe the asphalt layer is never less than 20 cm even for bike and walking lanes.
Yeah, it tragic. Uhuru project to tarmac 10,000kms came a gropper when contractor quoted as much as 200M to tarmac essentially rural roads.]
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Totally agreed. Something is clearly wrong somewhere. And it seem there is no leadership to tackle this head on.
That is way too high. A rural road in kenya should not even be a tenth of that amount. Surely in Western Europe that is the price going for a 4 lane highway.
Those are cartels at work. We were told the Chinese who booted out the Asian contractors would bring the prices of building roads down bit to no avail.
The most expensive item in building a road is asphalt component commonly known as tarmac in Kenya. Now these rural roads do not even have an asphalt layer of 2 cm. Now in Western Europe the asphalt layer is never less than 20 cm even for bike and walking lanes.