KPLC’s strict rules will build lo­cal in­dus­try

The Star (Kenya) - - News - BEN CHUMO

Build­ing a strong man­u­fac­tur­ing sec­tor is one of the key ways of cre­at­ing jobs for un­em­ployed youth. A thriv­ing in­dus­try will place Kenya in a bet­ter po­si­tion to at­tract for­eign di­rect in­vest­ments and world-class ex­per­tise, thereby tam­ing cap­i­tal flight and in­crease gov­ern­ment in­come from taxes and roy­al­ties.

Kenya Power has taken a de­lib­er­ate step in this di­rec­tion by pri­ori­tis­ing its pur­chase of equip­ment and ma­te­ri­als from the lo­cal mar­ket to en­cour­age man­u­fac­tur­ers to set up plants in the coun­try.

Un­der our new pro­cure­ment guide­lines, 80 per cent of all equip­ment and ma­te­ri­als needed for elec­tric­ity dis­tri­bu­tion will be sourced lo­cally.

This move is ex­pected to pro­vide an in­cen­tive to global man­u­fac­tur­ers who have been sup­ply­ing ma­te­ri­als to Kenya Power to re­lo­cate their op­er­a­tions to Kenya. We also ex­pect lo­cal man­u­fac­tur­ers and busi­nesses which have been part­ner­ing with some of the in­ter­na­tional sup­pli­ers to set up their op­er­a­tions lo­cally.

This de­ci­sion is based on a prag­matic ap­proach the com­pany adopted in early 2010, that has since paid off. For in­stance in 2013, there were about nine wooden and con­crete pole plants in Kenya. Dur­ing this time, we used to im­port wooden poles from as far as Chile, Brazil, and South Africa among other coun­tries.

To­day, there are 54 wooden and con­crete pole man­u­fac­tur­ing plants, thanks to our de­ci­sion to stop im­port­ing poles and locked the mar­ket for lo­cal sup­pli­ers. This has cre­ated thou­sands of jobs.

In­deed, our shift to use con­crete poles in an ef­fort to im­prove the longevity of the net­work in­fra­struc­ture led to the birth of a new in­dus­try.

With in­creased lev­els of con­nec­tiv­ity as we tar­get to con­nect 70 per cent of the pop­u­la­tion by 2017 and 100 per cent by 2020, there is a huge mo­men­tum for the poles sub­sec­tor. In fact, last fi­nan­cial year 2015-16, we con­nected a record 1.25 mil­lion house­holds, con­sum­ing more than 500,000 poles in the process. And this was just one item.

Sec­ond, we have locked the sup­ply of ca­bles and con­duc­tors for the lo­cal mar­ket. Cur­rently, we have five sup­pli­ers who pro­vide the ca­bles and con­duc­tors we need. Last fi­nan­cial year, we used close to 30,000,000 me­tres of ca­bles and con­duc­tors to con­nect the 1.25 mil­lion house­holds.

This fi­nan­cial year, we in­tend to spend Sh54 bil­lion to pro­cure goods. About 80 per cent, which is equiv­a­lent to Sh43.2 bil­lion of this cap­i­tal ex­pen­di­ture, will be spent to buy lo­cally made goods.

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