Eng. Matu is a registered Consulting Engineer and the serving Chairman of the Association of Consulting Engineers of Kenya. He is also the board chairman of APEC Consortium Limited.
What does local content mean to you?
Local content means local ownership, control and financing of activities connected with trade related investments, which are mainly being undertaken by foreign firms or organizations. Such investments/industries include mining, construction and manufacturing.
To enforce local content participation, the Government of Kenya (GOK) has provided a framework to increase the local value capture along the value chain.
Why do we need local content regulation in Kenya, considering we have a liberalized market economy?
Local content regulations are policy measures that typically require a certain percentage of intermediate goods and services in the production process be sourced from domestic manufacturers and suppliers.
The need for local content regulations is:
• Capacity building for the local workforce.
• Capacity building for local industries.
• Promoting local businesses (Industries and
suppliers).
What are some of the local content regulations and laws in force today in Kenya and how can these regulations be strengthened?
The National assembly Bill for Public Procurement and Asset Disposal of 2014 states that ‘for the purpose of ensuring a sustainable promotion of the local industry, a procuring entity shall have in its tender documents a mandatory requirement as preliminary evaluation criteria for all foreign tenderers participating in international tenders to source at least 40% of their suppliers from citizen contractors prior to submitting a tender’.
Government of Kenya’s requirement on local content participation” means 40% of supplies of workforces, services, materials and products to any Project or investment (Mining, Manufacturing, Construction etc.)
The above regulations can be enforced by:
• Public Procurement and Disposal Act 2015 (PPADA 2015) – For the purpose of ensuring sustainable promotion of local industry, a procuring entity shall have in its tender documents a mandatory requirement as preliminary evaluation criteria for all foreign tenderers participating in international tenders to source at least forty percent of their supplies from citizen contractors prior to submitting a tender.
• Creation of a monitoring and evaluation team to be involved in all stages of procurement i.e. Pre-qualification, selection, tender awards and confirmation of deliveries, shareholding and amount tendered.
• Local content participation should have been
enforced contractually.
• Preparation of periodic (monthly, quarterly, bi-annual, annual) reports on local content participation for each project/activity.
• Introduction of a penalty system for companies that don’t adhere to the GOK local content laws and regulations.
What challenges do these regulations face?
Some of the challenges in local content implementation:
- Poor enforcement of local content policies, laws and regulations
- Lack of open procurement of goods and services by foreign firms/contractors
- Difficulty in establishment of company ownership. Most foreigners register companies locally, hence difficulties in establishing company ownership within the context of local content.
- Absence of a monitoring body to enforce the local content.
- Inconsistent reporting in local content implementation
What were some of the local content objectives and targets in the first phase of SGR and were they attained?
As you are well aware the commercial contracts for civil works and the procurement and installation facilities, locomotives and rolling stock for the first Phase (Mombasa-Nairobi SGR Project) was signed in 2012, when the law on minimum local content was not in place.
This means that provisions for local content participation were not covered in the contract. However the government negotiated with contractor and agreed that the contractor would purchase goods and services locally to a minimum of 40%. At the completion of the project the local content was estimated at 36% of the civil works contract.
What is the role of APEC and yourself in the SGR project?
In the SGR project APEC is in a consortium of 3 consulting engineering firms that were competitively awarded by Kenya Railways to undertake Design Review and Construction Supervision for the Construction of a Standard Gauge Railway from Mombasa to Nairobi and Procurement and installation of Facilities, Locomotives and Rolling Stock.
Because of my vast experience in project management and supervision,I was given the role of Project Coordinator which essentially is an oversight role on how the consultant executes his work in total and coordinating with Employer, Kenya Railways, the relevant Government Ministry, Government Stakeholders and the Private Sector. This is meant to ensure that the Employer’s requirements are well understood by the consultant and the contractor while ensuring that there is adequate consultation with the other stake holders for a smooth and efficient delivery of the project
Which lessons have you learnt in the first phase of the SGR?
There were many lessons to be learnt from the construction of the first phase of SGR. Obviously it was the first time that this country had undertaken such a massive and complex infrastructure project which construction was initially expected to be completed in 48 months.
The main lessons learnt was that projects can actually be completed far ahead of time provided there is good and effective leadership, goodwill from all stake holders, prompt payments by project financiers, a well-organized management structure, a financially stable and well resourced contractor and above all teamwork that has a well-established communication system. This project was completed in 30 months thereby shedding off 18 months from the expected completion date.
Which challenges, technically, professionally or otherwise did you face in this project and how did you overcome them?
The main challenges in the SGR project faced emanated from the fact that the project was huge. A lot of people were skeptical that the locals were capable to handle this project. Another group of people preferred if they had won the project and this resulted in a lot of push and pull of the project which lead to a delayed buy in by the public.
At the beginning, a host of legal battles threatened to kill the project.
The other challenge involved the cultural differences between Chinese and Kenyans, Chinese standards and British Standards used in Kenya. The local sub contractors also faced challenges in keeping with speed of the Chinese. Some of the challenges that were solved entailed a strict resolve by the client,Kenya Railways was to remain focused and passionate about the project completion.
The multi-disciplinary nature of the project involved many stakeholders including KPLC, KETRACTO, and Water companies, 7 Counties, KWs, KeRRA, KURA, KeNHA and RVR. Co-coordinating all these took time in the project and was initially a challenge. After the initial learning curve these issues smoothened as the project climaxed.
Other key challenges experienced in the project are:
• Environmental and social issues
• Relocation of public institutions, services and
utilities
• Connection of services and utilities to Railway
Stations
• Traffic dispersal at the main hubs (Nairobi &
Mombasa)
• Harmonization of SGR design with existing
infrastructure
• Road crossings and accesses
• Security
• Construction materials (Sand harvesting for
sea reclamation at the port)
• Local content participation in the project
• Capacity building for local personnel
Most of these challenges were overcome through constant engagement with the contractor affected communities, utility service providers (KPLC, Water Companies), Road Agencies (KeRRA, KURA, KeNHA, County Governments), Kenya Police and other stakeholders.
To monitor the situation, a tracking list was developed for follow-up of each issue.
What aspects of the project would you like to see changed in the second phase?
I’d like to see an increase in local content application, more employment of local professionals to participate to the construction works and an early buy-in by the public. Participation by the affected counties in the planning the corridor is also crucial to ensure that the belt within the SGR is maximized in spatial planning and implementation. The counties should set aside land early enough for development of industrial zones, special economic zones etc.
What is your overall assessment of the project, implementation and the expected impact?
SGR project is a catalyst to economic growth. Its completion is a significant milestone in Kenya Vision 2030 programme. The mass movement of people between Mombasa and Nairobi including the intermediate stations means heightened economic activity and engagement of more Kenyans.
The seamless flow with the existing transportation channels including roads, and airports means spurring of economic growth and increase in GDP. It also means reduced congestion along the truck routes and at the port of Mombasa. Overall the project is a big success and its impacts are both short and long-term. It will further result in more investors and visitors preferring Kenya as a destination.
What occupies your time as the Chairman of the Association of Consulting Engineers of Kenya (ACEK)?
I take the job of being chairman of ACEK as a honour bestowed upon me by the members to serve the association in a manner that is seen to fulfill its mission of promoting and improving the business and professional interests of ACEK members in the built and natural environment.
I lead a council of members that meets on monthly basis to deliberate and solve issues that arise during the period. We deliberate on the training programs to be handled within the year, we also respond to issues that affect the whole membership of the association especially now when we are faced with a major problem of unfair competition with foreign firms, and lack of adequate work for consultants.
We look at the bills that go before parliament and give our comments to ensure that our interests and views are taken into account. It is a difficult job considering that all of us in the council are working full time in our own firms which can be challenging.
As a chairman I also ensure that our secretariat responds to letters from our stakeholders. We also do networking with FIDIC (Federation of Consulting Engineers) and GAMA (Group of Africa Members Association) who are members of FIDIC, APSEA and KEPSA among other bodies.
What are some of the achievements of ACEK during your tenure
There has been increased visibility of ACEK. However, the biggest achievement has been conducting FIDIC training programs which has boosted our financial collections to an extent that now we are in a position to purchase an office for the association. This has not happened since the formation of the association. However, I cannot take all the credit because the previous councils led by Eng. Kariuki Muchemi and Eng. James Mwangi who were my predecessors as chairmen were the ones who started this idea of training which has led us to where we are now.
Another important milestone that has happened during this period is the fact that we firmed our secretariat by employing our Executive officer who has been instrumental in advertising for our training courses and collection of monies which would have been a difficult task for the council
In 2016, our council reviewed the Rules Bill 2015 and we strongly lobbied the senate to retain Kenya Urban Roads Authority (KURA).
What are some of the challenges you have experienced as ACEK chairman as you pursue the interest of your members?
Some of the immediate challenges that I have faced as the Chairman include; while I have a very vibrant council, there is general apathy from ACEK members but I think it’s understandable considering that the local consultancy services sector has not been doing well for some-time.
This is because we have very few jobs that have been coming our way and therefore I feel that members may not see the need to continue talking to the association. The main reason that can be attributed to lack of jobs has been the fact that there are many foreign firms who are now operating in Kenya who have gone as far as registering their own local companies to avoid taxes and they are giving our local consultants an unfair competition. Since the Engineers Board of Kenya (EBK) started operations, they refused to register quite a number of consultants on the basis that all shareholders must be registered as professional Engineers. This is a complete contradiction to the provisions of Engineers Act which ACEK participated in drafting which requires that only one registered professional Engineer needs to be shareholder in a company.
Some of the consulting firms have gone to court while others have appealed to the Ministry of Transport Infrastructure, Housing and Urban Development to intervene and resolve this matter. We are still awaiting for a resolution of this issue and believe that this interpretation has arisen due to the fact that ACEK is not represented in the Engineers Board of Kenya.
For a long time, delayed payments to consultants has been the order of the day and consultants have been receiving only intermittent payments which does not help in their growth. We have been asking EBK to agree to a consultative meeting where the issues of the engineering consultant as the practitioners of the consulting services will be discussed and resolution found. During my tenure, there has been poor relationship with IEK and EBK arising out of some resolvable issues which just need consultations between us or some form of mediation.
Have you got challenges with professional ethics amongst your members and how do you enforce your code of conduct?
There are challenges with professional ethics but the ones we deal with are only the ones reported to us. Unfortunately, we have received very few cases and we have handled them in accordance with the regulations. I think reporting of unethical practices is very low because there’s a feeling that the association may be toothless and most cases are now being reported to EBK which has been mandated by the Government to carry out the regulation of the conduct of Engineers / engineering companies.
How can professionalism and ethics be enforced in engineering and amongst engineering professionals all over the country?
Engineers Act 2011 was enacted to ensure that professionals and ethical practices are enforced in all engineering practices and all Engineers respective of whether they are association members are expected to follow the provisions of the act to the letter.
The body that was to regulate the practice and conduct of the Engineering professionals is the Engineers Board of Kenya which currently appears to be understaffed and may need to increase their capacity. When it comes to this, it’s a question of the individual Engineer to ensure that whatever they do is within the code of conduct of the Institution of Engineers of Kenya. When it comes to individual consultants, we have a code of conduct for ACEK members; this should be adhered to, to ensure fair play and elimination of corruption within the industry. It’s also notable that KEPSA has a code of conduct for business members or organizations and we are part of them.
How do you find the uptake of the courses you provide to engineers such as the FIDIC trainings, are the courses effective as tools for professional development?
FIDIC courses have proved to be very popular because many employers of goods, works and engineering services have embraced the use of FIDIC Conditions of Contract in many of their projects. It has therefore become a necessity that Engineers and other related professionals in the construction industry be conversant with these conditions to ensure that the projects they handle are executed as per the terms and conditions in the agreement between the employer and the contractor. This is very important to ensure that projects are completed within the stipulated time, within costs, high level of quality and with minimum claims from both parties.
ACEK conducts these courses twice every year with an average of about 80 participants per session. I rate the courses to be very effective and the training material is reflective of the reviewed conditions of contract as time goes by. We have actually applied for CPD (Continuous Professional Development) accreditation by EBK.
What became of the annuity financed roads project in which ACEK was one of the stakeholders?
ACEK members participated in the stakeholders’ forum which was organized by Ministry of Transport and Infrastructure. We even participated in the tender, together with contractors but we have learnt of late that the quoted prices were too high and not affordable by the Government. The rate per Km of road ranged between 200-300million which we also think is way beyond the real cost and believe that this was due to the fact that banks were also included in the consortium and overloaded a lot of risks in the cost. So in short, we can say that the program failed. However, Government came up with a new program for the low volume sealed roads (LVSR) which are far cheaper, affordable and this is what is being implemented.
These contracts were given to contractors, who are now very busy working on them. Unfortunately, ACEK members or the general consultants have not been involved in these process so far hence the reason there is shortage of work.
ACEK members however submitted our technical and financial proposals to KeRRA who are implementing these works and we hope that we shall soon have our members contracted to carry out supervision works.
What do you do at APEC
I have been serving as the Chairman of APEC board of directors for the last 5 years having served the company before this since its inception in 1995 as a Managing Director. APEC is managed by a board of directors who double up as the management of the company. My role in the company is to provide leadership and to ensure that the overall performance of the company and the board is kept at an all time high.
Apart from chairing board meetings my role includes review and approval of strategic plans that will propel the company forward, initiating policy decisions in close coordination with the managing director, ensuring that the company maintains a sound management structure with experienced and qualified management teams both at technical and administrative levels. As an experienced technical expert coupled with a solid background in project management, I act as a keen listener and adviser to various Technical Teams, Management and Board of Directors. My experience in infrastructural works and training in project planning and management, places APEC at a vantage position in line with the Country’s Vision 2030.
What are some of the signature projects that have been undertaken by APEC?
Through competitive bidding and formation of strong technical teams to steer projects, APEC has been involved in some of the country’s’ largest vision 2030 flagship projects. Some of these projects include:
• Design Review and construction supervision of Mombasa-Nairobi Standard Gauge Railway
Project,
• Design and construction supervision of the Expansion of the Nairobi-Thika Highway,
• Feasibility studies and detailed design of the second Runway at Jomo Kenyatta International Airport.
• Remodeling the passenger terminals at JKIA.
• Preliminary and Detailed Design of Outer Ring road which is now under construction
• Preliminary and Detailed Design of Eldoret By-pass.
• Design Review and Construction Supervision of Mwatate-Taveta and Gacharage- Kangema roads.
• Design of Mwache Multipurpose Dam
• Several others
What are the inspirations for this company and what differentiates it from other engineering companies in Kenya?
The main inspiration of the company is the available opportunities for infrastructure growth in Africa, particularly in Kenya and East Africa, and our drive to participate in modernization of the continent to meet International Standards.
The vision of the company is to extend Engineering Services beyond East Africa and open offices in the region. To achieve this the company is putting systems in place to go public and have it listed in the stock exchange just like many international firms who are now operating in Kenya and the region
APEC has focused and specialized in Transportation Engineering (Roads, Airports and Railways) and other Infrastructural Works like Water and Sanitation, Dam Projects and Building Services. Our main strength is the ability to mobilize strong technical teams and resources to deliver mega projects.
Have you faced staffing and skills challenges in the company as you bid for or undertake your projects?
Staffing and skills challenges appear to be a national problem. Experienced and registered engineers are a scarce commodity, because Kenyan engineers are international and are providing their services in other countries.
Many graduates are leaving universities and are not getting a proper opportunity to train as graduate engineers and therefore they remain un-registrable as professional engineers for long periods of time, thereby denying the market the much needed human resources to plan, manage and execute the implementation of infrastructure projects which the government has continued to increase in terms of capital expenditure. Further, the Engineers Board of Kenya has been slow in registering professional engineers to fill the gap.
At the same time Employers have been insisting in many years of professional experience for an individual key personnel which we feel is stringent considering availability. All of us in the consulting engineering business are facing this challenge.
Where do you see the company in the next decade?
If the region sustains steady growth in infrastructure development as witnessed, then APEC is bound to grow to higher levels. This growth will propel the company to the Nairobi Stock Exchange, to enable it tap more resources to finance its growth to International Status.
