Telecom firms and banks lead race for Konza

Posted In Business, Real Estate - By admin on Thursday, March 21st, 2013 With No Comments »

konza1Investors in real estate, telecoms and financial services have shown the biggest interest in Konza Technopolis whose development is expected to begin later this year.

The three sectors alone represent about 38.2 per cent of the 303 formal requests so far made to the Konza Technopolis Development Authority (KOTDA) for inclusion in the initial phase of the project.

Kenyan investors are poised to be the key drivers of the Konza project with 81 per cent of the enquiries so far registered with the authority.

Investors from the rest of Africa, the Middle East and Europe have also expressed interest in the project dubbed “the Silicon Savannah”.

“We expect more requests from investors seeking to participate in the project,” said Catherine Adeya-Weya, the acting CEO of KOTDA.

Entrepreneurs with exciting business ideas but who lack adequate capital also stand a chance to team up with deep-pocketed investors who have approached KOTDA for advice on where to put their money.

“These are people who have the capital but have not identified specific sectors to invest their money,” Dr Adeya-Weya said.

Information permanent secretary Bitange Ndemo said in January that Kenyan firms, including Safaricom, Wananchi Online, Kemri, Kari, the University of Nairobi, the Jomo Kenyatta University of Agriculture and Technology and the Nairobi Hospital have committed to setting up shop in Konza.

The PS disclosed that Huawei Technologies of China, Korean electronics giant Samsung, Telemac of the US, Canada’s Research In Motion (RIM) — the makers of the Black Berry phone — are in the list of foreign firms that have expressed interest in the technopolis project.

Others are Google, Craft Silicon, Telemax Technology Corporation of Taiwan and Shapoorji Pallonji Group from India.

Dr Adeya-Weya said phase 1 of the Konza project covers a 400-acre portion of the 5,000 acres site off the Nairobi-Mombasa highway.

This segment of the city has been earmarked for construction of residential houses and related amenities such as cultural centres, parks and a university complex.

Work on the initial phase of the project is expected to take five years beginning 2013.

“We have placed a bid for a master delivery partner who will drive this segment of the project,” Dr Adeya-Weya said.

Once the partner is picked, he will take full charge of land lease negotiations with investors, design, construction and management of public infrastructure.

The partner will also conduct due diligence on investors to be awarded stakes in the technopolis.

Dr Adeya-Weya said the authority will hold a bidders’ conference on April 3-4 to sample their proposals.

Six bidders have been shortlisted for the delivery partner’s role and are expected to table their proposals in a fortnight.

The companies in the race for the role include Dar Al-Handash Consultants (Lebanon), Artelia Ville and Transport (France), Capita Symods Plc (UK), Azure Strategic Planning and Development with Sasaki Associates (Canada), Tetra Tech (US) and Aecom South Africa Limited.

The bidders have teamed up with Kenyan Information Technology (IT), marketing, real estate and construction firms to meet the broad scope of work spelt out in the tender documents.

Dr Adeya-Weya said investors in phase 1 of the project will sign lease agreements for any land allocated to them.

KOTDA is offering the investors a 99-year lease with a 25-year payment plan.

The arrangement is to be reviewed after a decade with the Treasury remaining as the custodian of the land.

“There are also proposals to offer special investors free land,” Dr Adeya-Weya said.

That window is, however, restricted to investors who can quantify and prove the significance of their business to the Kenyan economy.

Konza master plan indicates that investors in transport and other public facilities will get 130 acres – the biggest share of the 400 acres set aside for phase-1 of the project.

Mixed-use developments will be allocated 89 acres, parks (79), universities (39), life science (26), residential (26) while offices, retails and cultural facilities will have 11, 8 and 1 acre respectively.

Stringent conditions have been set for the investors to ensure order within the metropolis.

“Orderliness is one of the cornerstones of this project and must be upheld,” she said.

KOTDA also plans to take full charge of the affairs of the technopolis through an amendment to the law on urban settlements.

“History has shown it that running such a project using diverse authorities does not work,” Dr Adeya-Weya said. “We have made proposals to amend the KOTDA statute to take full charge and directly manage the affairs of the technopolis.”

President Kibaki in January called for strict regulation of land-use and planning around the city to prevent the mushrooming of unplanned structures that would injure its image.

Key issues

Firms within Konza would be required to support the country’s policies on key issues such as job and wealth creation, Dr Adeya-Weya said.

“There many ways of promoting this,” she said. “We may, for example, use employment-based grants linked to the number of people employed and jobs created to drive that agenda.”

Konza has been gazette as part of the Special Economic Zones that will replace the Export Processing Zones and hopefully create some 200,000 jobs annually.

The Kenya government is seeking to use public/private partnerships (PPP) to develop the city and the area within a 10-kilometre radius of it.

-Business Daily

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