Battle for road tenders hots up as US giant opens Nairobi office

Bechtel has undertaken projects in Africa.
Bechtel has undertaken “hundreds of projects in Africa”. PHOTO/FILE
California-based construction giant Bechtel is setting itself up for a tough battle with Chinese multinationals for mega projects in Kenya amid concerns that Asian contractors are increasingly dominating the local construction scene.

Bechtel, which is one of the largest engineering and construction companies in the world with annual turnover of about Sh3.2 trillion, has opened its Africa office in Nairobi from where it will launch its battle for a piece of the continent’s big-ticket infrastructure works.

“Our new office in Nairobi presents an opportunity to focus on building stronger relationships with our customers and their communities,” said Andrew Patterson, Bechtel’s region president for Africa.

Bechtel has undertaken “hundreds of projects in Africa” including the construction of a 5.2-million-metric-tonne-per year LNG processing in Angola, a project that the company completed in 2012.

As a starting point, the US construction giant has already expressed its interest in the forthcoming expansion of the 485-kilometre Mombasa-Nairobi highway into a six-lane dual carriageway.

READ: Nairobi-Mombasa highway’s Sh230bn expansion begins 2018

The US Export Import Bank is strongly pushing Bechtel to secure the contract in an arrangement similar to that of the China Export Import Bank where the Asian bank funds projects contracted to Chinese firms.

“With the support of the US government agencies such as Overseas Private Investment Corporation (OPIC) and the Export-Import Bank, we can provide solutions to move this critical project forward quickly with a high standard of quality,” Mr Patterson added.

The entry Bechtel – along with its financial backing by the US Exim Bank – will complicate matters for Chinese multinationals who have been winning all tenders for projects financed by the China Exim Bank.

READ: Chinese builders win praise from Kenyans for mega projects

By financing local projects, the US Exim Bank will give Kenya a second funding option, which has been lacking – making all big ticket projects to go to Chinese companies.

Over the past decade, Chinese have scooped nearly 90 per cent of the lucrative tenders issued by the Kenyan government particularly those touching on roads, rail and port projects.

Local contractors have been in the past blamed their woes on the government’s move to raise demand on firms during the tendering process, for instance requiring experience on big ticket projects – which most local firms lack due to many years of under investment in the sector.

However, the workmanship of Chinese contractors has consistently earned many accolades from both ordinary citizens and government officials.

On the other hand, local contractors have over the years received negative reviews from members of the public mainly due to delays in completion of projects and poor workmanship that has seen rising incidents of collapse of buildings, bridges and incomplete projects.

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