Home Latest News South African firm wins tender to build new Athi River abattoir

Published on Monday, 23 March 2015 05:45

A South African firm has won the tender to build a new plant at Kenya Meat Commission (KMC) worth $11 million (Sh1 billion) after the government dropped plans to repair the existing one.

Agriculture CS Felix Koskei told Parliament last week that the cost of renovating the current facility is $33 million (Sh3 billion). He said an international tender for construction of a modern abattoir or upgrading the existing factory returned bids of Sh1 billion and Sh3 billion respectively.

“Two people were interested in modernisation. They quoted $30 million and $33 million. Five showed interest in constructing a new factory and the lowest, a South African firm, bid $11 million,” the minister said without giving details on the contractor.

“The KMC management did the right thing and awarded the lowest bidder at $11 million as opposed to $33 million for modernisation.

‘‘We advertised in August and during the pre-bid conference, all bidders said it was more expensive to modernise than build a new factory,” he added.

The Treasury allocated KMC Sh700 million for revamping the facility. The commission is yet to use Sh200 million, which will go towards building the new plant.

“We have asked for a further Sh700 million in the next financial year to build the factory. We expect the factory to be up and running within nine months of signing the contract with the winning bidder. What we are awaiting for is signing of the financial agreement by the Attorney-General for us to sign the contract,” said Mr Koskei.

READ: Top KMC bosses row over tenders in upgrade plans

KMC reopened in 2006 after a 15-year shutdown with the government injecting billions of shillings into the plant, including paying National Bank Sh5.2 billion it had guaranteed the factory.

The government is currently finalising work on four slaughter houses built in Isiolo, Wajir, Garissa and West Pokot counties, under the economic stimulus programme, to cater for the export market.

The new development comes at a time when KMC has been marred by boardroom wars pitting the chairman against the chief executive, with the former accusing the latter of interfering in the process of issuing the contract.

Mr Koskei said that an appraisal of KMC was carried out in 2013 to understand what was ailing the plant.

“We found two things that had not been done: KMC equipment is obsolete, very inefficient and costly. Two, the 480 members of staff consume about Sh18 million monthly and do almost nothing,” he said.

Source: Business Daily.