Status & Challenges in the Construction Industry WORLD ACCREDITATION DAY - 2017 Presentation on: Status & Challenges in the Construction Industry Presentation By: Qs David Mathu – Manager, Research & Business Development

Overview of the Construction Industry Opportunities in the Industry CONTENT Introduction Overview of the Construction Industry Opportunities in the Industry Registration Status of Contractors Milestones of NCA Challenges facing the construction industry

INTRODUCTION NCA is a State Corporation with the broad mandate of overseeing the Construction Industry & coordinating its development Core functions of NCA include, among others: Promote & stimulate expansion of industry Undertaking research in the industry Provision of consultancy and advisory services Promote quality assurance exercises in the industry Training of key industry players Accreditation & registration of contractors and construction workers

Overview of Kenya’s Construction Industry The construction industry in Kenya is at a boom granting it a competitive advantage among its regional counterparts The industry is a key contributor to (GDP) and an attested arterial income earner for over 1 million Kenyans Realization of vision 2030 heavily relies on robust industry development and resilient competitive construction industry Responsibility of bettering the industry rests upon coordination and regulation by industry regulators; county governments, and Government agencies, and with NCA being key Formed through Act 41 of 2011, NCA has grown to regulate the construction sector in 5 classes of works i.e. Building Works Electrical Works Mechanical Works Water Works Road Works

DIVERSITY OF THE CONSTRUCTION INDUSTRY Lake Turkana wind project Standard gauge Railway Lamu port and New Transport Corridor to Sudan & Ethiopia

Tatu city Konza city JKIA Expansion & Modernization

UAP Building Upperhill Britam Tower Upperhill KCB Building Upperhill UAP Building Upperhill

Opportunities in the Kenyan CI Deficit and Demand for Affordable Income Housing The huge deficit in infrastructure including rail, roads and ports present a significant case for continuing growth in the building and construction sector. NHC reported a 200,000 Housing Units Per Year.There is also a need to provide more affordable housing for low and middle income households The Gap Of Green Design & Sustainable Building Initiatives The need to attain international standards of sustainability rating will pose a challenge in the real estate market as new buildings will be required to meet a standard sustainability ranking This will create a gap that needs to be filled by green building initiatives and demand for more professionals to embrace leadership in sustainability design Proactive town-planning approach Urbanization should be anticipated rather than reacted to and necessary infrastructure to accommodate inward migration should be put in place before it actually arrives Proactive planning plays an important role in managing the growth of cities and townships by allocating land for future uses and controlling the pace and type of development The aim of town planning is to manage change to achieve a preferred future Technological Advances Technological advances are likely to make eco-efficient building more practical New technologies in the market call for better technical know how and preparedness to adapt to changes in techniques of building

Registration Status of Contractors Category NCA 1 NCA 2 NCA 3 NCA 4 NCA 5 NCA 6 NCA 7 NCA 8 Total Number 923 786 1,190 4,327 4,494 8,486 13,387 14,456 48,049

MILESTONES OF NCA Successfully organized 2 Annual Construction Research Conferences & Exhibition [ACORCE] with another upcoming one in Nov. 2017 Organizing a Research journal to publish researches We have formed partnership with universities & research institutions Currently developing the National Construction Institute Working on an invoice discounting model for contractors Online portal for registration of contractors [CB Initiative] Registration of over 49,000 contractors and 267,000 skilled construction workers and construction site supervisors Expansion of NCA offices to 16No

CHALLENGES FACING THE CONSTRUCTION INDUSTRY Cost of Construction material Cost of construction is relatively high as most of the building materials are imported and overland transport costs are relatively high Capital; financing The industry needs adequate financing in order to thrive High interest rates also make it very hard for contractors to access capital Corruption The industry is dominated by corrupt procurement and tendering processes Contractors have resulted to bribing Government and private officers to win construction projects and sometimes under-price to win tenders

OTHER MAJOR CHALLENGES Quality assurance and Skills gap Existing skill gap leads to poor workmanship, faulty structures and building failure experienced in the recent past calling for measures to regulate the construction industry, build capacity and ensure quality control Occupational health and safety Construction industry is considered risky with frequent, high accident rate and ill-health problems. Fatal accidents are rampant in construction sites, workers are exposed to hazards of occupational diseases and injuries.

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