Konza City: Is it just a dream or can it be done?

There is a bare piece of land spreading 5000 acres somewhere between Nairobi and Mombasa near Machakos town which has been termed by some as the future city of Kenya. Of course others would rather wait and see to believe it. The land that has raised much buzz has been marked a Special Economic Zone (SEZ) for establishment of Konza Technology City, Kenya's own ICT city equated to the US' Silicon Valley.

The African Silicon Savannah, as it has come to be known, is expected to brand Kenya as a global destination of choice for technological innovations, business incubation and research creating many employment opportunities and lots of wealth for the country once completed. The grand plan involves putting up business centers, hotels, schools, universities, hospitals and even residential premises capable of hosting global and local companies.

On the continent, Konza can be closely compared to Cairo's Smart Village or Mauritius’ Ebene Cyber City, just bigger in scale. It’s being spearheaded by the International Finance Corporation (IFC) as the project adviser and numerous consultants. The groundbreaking of the Sh2 trillion city has been postponed several times since last year though the Ministry of Information and Communication says the plan to this is still on schedule.

Permanent Secretary, Bitange Ndemo has said IFC is still working on the process of getting a Master Developer after it completed developing the concept Master Plan. The project will be carried in various phases spanning be over 20 years with the first phase expected to be complete in five years. The ministry has already spent about Sh40 million in the past months in advertising and marketing Konza to potential investors even as the advisor works out a business case for foreign investors.

Though treasury allocated Sh600 million to the project last year and is expected to put the same amount this year as part of the Sh2.25 billion resource requirement,the deficit expected to come from the private sector in this PPP initiative. Being one of Vision 2030 projects, the secretariat has been marked it as behind the schedule giving a start date of August 2012. “The Ministry of Lands invoked the physical planning act that seeks for consultation and they gazzeted the start of consultation that will take us to June,” Ndemo said in April when the construction was expected to commence.

As much as the idea of having our very own Silicon Valley, just 50km from Nairobi, has raised a lot of excitement, not everyone is convinced. Robert Yawe of KAY System Technologies sees given that the Konza idea was born during the current Kibaki government fears what happens next year when another government takes over and puts its priorities elsewhere. He says, even PS Ndemo, who is the champion and chief publicist of the project, might not be in his position once the next government is in place.

Recently, Vision2030 CEO, Mugo Kibati said Konza city has now been labeled ‘kwa Ndemo' owing to the enthusiasm the PS has showed towards the project, against many skeptics. There are also concerns on whether it will be given priority among other activities like constitution implementation, elections, Lamu port project, Isiolo Resort city construction and now oil discoveries.

Another political issue clouding the project is that the 5000 piece of land lies on more than one administrative county and different town councils. “Expected planning it to be done jointly by 3 councils, when Nairobi and Mavoko cannot agree on the boundaries of their jurisdictions what do we expect from their smaller siblings?” says Yawe. “If we take the current 5,000 acres and then include the proposed 10 kilometer wide buffer zone Konza becomes large enough to be a City or even a County,” he proposes.

A public site development authority, the Konza Technopolis Development Authority (KTDA) is in the process of being established to oversee the planning, infrastructure development and land allocation within the site. Other critics have  termed it as a 'white elephant', an idiom for a valuable but burdensome possession of which its owner cannot dispose but whose cost  are higher than its  usefulness.

“I am not convinced that the government has the will power required to run and maintain a completely new city when our existing cities are already in dire need of attention. It will take a lot of convincing to investors that Konza will be different from Nairobi or Mombasa,” Tom Makau, a telecoms professional and blogger on ICT policy and regulations issues.

Makau also argues just offering land for development to potential investors will not be enough to make Konza City tick among potential international players. “What the promoters of Konza city forget is that these investors will be coming to run a business and make a profit, not to run the city, the flashy design of the proposed city and its maintenance will be Kenya’s responsibility and not Apple’s, HP’s, Google’s or Oracles’,” he says.

In Mauritius, Ebene Cyber City was also a PPP between a government owned corporation and Software Technology Parks of India as the primary contractor. The contractor prepared a fully worked-out business plan for the establishment of the City and oversaw the setup of the basic infrastructure. The question of why private investors would agree to construct quality real estate on some unproven empty piece of land in the middle of nowhere when they can do it in proven Nairobi stands.

Because of the city’s grand scale and hype, land speculation in the surrounding has risen high Marked as a Special Economic Zone regime (SEZ).Depending on the distance from the ICT park, the land is going from Sh500, 000 to over  Sh1 million per acre, up from just Sh40 000 about a year ago. It is almost given that unstructured developments could arise around the area, a situation like what happened around other hot zones like around JKIA, Industrial area where slums have erupted. “I think it is sad that we start to speculate on land before the project is up.  I would have hoped that people would pull the resources together in order to become investors in Konza Techno Park which is one of a kind in this region,” Ndemo laments.

In bid control unplanned developments around the land the ministry of Land has gazzeted a 10 kilometer radius buffer zone on the land while MOIC has fenced it. Another issue raised is that Konza will take away so more than resources intended for other areas more than create development. “The surrounding Machakos, Wote, Athi River and Kitengela have perennial water problems imagine how much worse the situation will get once the new City kicks off,” says Yawe.

He adds, “The countries growing demand for energy and water will not stop even after Konza, which is the reason why we must incorporate the project into the national strategy and stop trying to build a mooted castle”. The ministry of Water has said it will be constructing a dam for provision of consumption water that it says could be used to generate some electricity.

With about 200 000 jobs expected to be generated in the initial stages through BPO centers, Makau raises the question of the skilled workforce that Kenya plans to use to attract investors. “Kenya boasts of a well-educated work force with a good mastery of the English language. Sadly majority of this work force falls far behind what these multinationals would expect to employ,” Makau says. “Majority of the technology companies in Kenya today are hiring expatriates due to the shortage of local qualified and skilled personnel,” he adds.

Inspite of the criticisms, some local companies and institutions have shown interest in the project. Telecoms operator, Safaricom, says it's looking to use the space to develop a world class data centre and to host other technical facilities. Nzioka Waita, Safaricom's director of Corporate Affairs says, “We support the concept that an ICT centric development could help spur economic growth and position Kenya as a top 10 ICT investment hub globally, particularly if the area is designated as a special economic zone that provides major economic incentives”.

However, Safaricom says its investment will be highly dependent on the final investment model that the Government adopts for making the land accessible to investors. “We are pushing for taxation and other financial incentives that would make the option of Konza City more attractive than other investment opportunities that we may have,” Nzioka said.

Other entities that the ministry of information says have expressed interest include Seven seas Technologies, Express Automation, Computer Pride, Chandaria Group, Tea Board of Kenya, Nairobi Hospital, University Of Nairobi and South Eastern University College. Mortgage Financier, Housing Finance says is also looking to gain from this grand development. Frank Ireri the firm’s Managing director say it will be looking to financing housing developments and probably developing structures in the technology city. “It is however too early to tell what size of investment we might put in, it still at the concept development stages,“ says Ireri.