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Construction of Kenya’s tech city begins

Ground breaking of Kenya’s multi-billion dollar Konza Technology City kicks off today despite project delays, a land procurement scandal and concerns from industry experts.

Kenya’s President Mwai Kibaki is expected to preside over the ground breaking ceremony of the 5,000-acre city project, also ref erred to as Silicon Savannah.

The project is to be built just over 60 km from Nairobi and is planned to feature business processing outsourcing (BPO) centres, a science park, university campus, an international business district and commercial and residential properties.

The city is also is intended to form part of the Kenyan government's 2030 plan to create jobs and boost the economy. A private-public partnership financing model is to be implemented, whereby government has offered the land and is building infrastructure such as electricity, water, rail and roads.

And according to Kenya’s information secretary, Bitange Ndemo, the project has thus far attracted 250 foreign and local firms to invest in the $10 billion project.

The firms are mainly in the IT, education, hospitality; banking and real estate sectors from nations such as Kenya, Korea, Japan, Canada, India and China.

The full list of companies involved is to be unveiled today. But Ndemo says 18 of them want to start immediately while 30 have indicated that they will put up investment after the March 4 general elections.

Ndemo says Kenya’s biggest mobile operator Safaricom plans to build a data centre on the property, while Samsung Electronics has also signalled intentions to set up an assembly plant in the tech city.

However, controversy has surrounded the project.

Earlier this month, reports emerged that a deadline for the Master Delivery Partner 2 (MDP2) of Konza City bids has been extended from January 10 to January 25 by Kenya’s Information and Communication.

MDP2 is intended to support the development plans of the Government of Kenya and the Konza Technology Development Authority (KOTDA) through the implementation of Phase 1 of Konza Technology City. MDP2’s purpose is also to create a branding and marketing campaign, negotiate land leases, the conducting of a financial analysis and summary, introduce public realm guidelines and building parcel guidelines as well as manage the construction and design of public infrastructure

No reasons for the delay were given by government.

Last year, ITWeb Africa also reported about an alleged land procurement scandal regarding the project.

It came to light that Kenya’s Ethics and Anti-Corruption Commission (EACC) planned to investigate Bitange Ndemo along with the Ministry of Information and Communications’ chief procurement officer for purchasing the land through direct procurement instead of an open tender. Such a move could have flouted the country’s procurement regulations. The land was bought from Malili Ranch Limited in Machakos County at 1 billion shillings ($12 million).

Ndemo, though, has denied the allegations, saying that competitive bidding was undertaken before purchase of the land.

“The Cabinet had authorised us to buy 10,000 acres but following valuation by the Ministry of Lands that put the price per acre at Sh200,000 we settled for 5,000 acres which were purchased through a competitive tender,” said Ndemo.

Kenyan technology experts, though, have also questioned the local need and focus for the project.

Kennedy Kachwanya, a Kenyan tech entrepreneur, says government could be neglecting local startups and focusing too much on multinational companies buying space in Konza.

Kachwanya says startups that have sprung up in Nairobi’s famous Ngong Road, for instance, could find it too expensive or even impractical for them to move over 60 km away to Konza.

“The government of Kenya is focused so much on dealing with multinationals, which of course is fine,” Kachwanya has told ITWeb Africa.

“The reality is that the majority of jobs and growth is fuelled by startups and small businesses.

“But the thing is the government has gone far with it (Konza) to the extent that there’s no turning back,” he concludes.

Original article Published on 23 January 2013 by Gareth van Zyl

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