• April 18, 2024
  • Last Update April 18, 2024 6:55 PM
  • Nairobi

House committee adopts proposal to protect local contractors

Business

By Peter Ochieng

Members of the National Assembly’s departmental committee on finance and national planning have adopted a proposed legislation meant to amend the Public Procurement and Asset Disposal Act, to protect local contractors.

In a sitting on Thursday morning, members noted that there is need to prescribe the threshold of procurements that shall be awarded to local firms, to promote growth of local industries, before moving to adopt the Bill sponsored by Kiambaa legislator John Njuguna.

The proposed Public Procurement and Asset Disposal (Amendment) Bill, 2023, further prescribes a penalty for any person who registers a firm on behalf of a non-Kenyan, for purposes of benefiting from a procurement that falls within a prescribed threshold.

Making his contributions, MP Njuguna said that local contractors had missed out on opportunities to develop capacity for large contractual works, because the threshold set for such works is way out of their way, and favours their international counterparts.

“My proposal is driven by an interest to protect our local contractors, their businesses and our economy. I have done a survey across the continent and I am aware of countries like South Africa where local players are protected against international players. It does not help that when these international contractors get these works, the profits are ploughed back to their host countries, so we lose out,” he told the committee.

The MP said there is nothing wrong in allowing local contractors to grow their businesses to the stature of their international counterparts, that have been bagging most contracts that are worth Sh1 billion and above.

He suggested that the law be amended to provide that all contracts worth Sh1 billion and below be reserved for Kenyan contractors, while all international contractors be obligated to partner with local contractors with 30 per cent of procurables reserved for local suppliers.

Weighing on in the matter during the meeting chaired by Kitui Rural MP, David Mboni, members while welcoming the move cautioned that unscrupulous businessmen could take advantage and front local players as directors, while withholding the actual ownership of companies in the backend.

Members also pointed out that proposals in the proposed Bill need to be evaluated alongside a previous proposal, that had been brought before the Committee, but which had set the threshold for awarding local contractual jobs at Sh5 million.

The legislative proposal which was adopted by ccommittee members is set to be published for consideration by the House.

Once the Bill is published, the committee has the second opportunity to re-examine the same legislative proposal and invite comments from the public.

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