The National Construction Authority Act, Number 41 of 2011 is set to streamline, overhaul and regulate the construction industry in Kenya. The industry has for many years suffered poor legislative framework and has been dominated by quacks and unqualified persons. The industry has also suffered a lot of competition from foreign contractors who are seen to offer cheaper and more quality work.
The new Act is a win for the public as it guarantees public safety. All contractors must be registered with the Authority meaning that shady contractors and quacks will be locked out of the industry. It is an offence to carry out any construction work without first having been registered with the Authority. The Act contains provisions on quality and safety standards of any construction work.
The Authority is also charged with passing regulations from time to time on the quality of construction offered by contractors. The Act will also play a big role in streamlining the quality of construction work within the country. The Authority has wide ranging powers including accrediting training institutions that offer courses related to construction.
The new Act is also a win for local contractors as some of its provisions serve as a protective mechanism to the local industry. The local contractors face a lot of competition from foreign entrants most of whom undercut their charges. Bilateral agreements between Kenya and other governments, especially relating to construction, have opened the market to a lot of competition. The new Act has some carefully worded provisions whose net effect would be to guard local contractors from unfair competition from foreign contractors.
The Act establishes the National Construction Authority which has been given wide ranging powers as far as the industry is concerned. The definition of construction is also very wide and covers anything from buildings, roads, dams and telecommunication apparatus amongst others. The NCA’s functions are to generally regulate the industry (including maintaining a register of contractors), promote the construction industry within the country, assist in the exportation of construction to other countries, ensure that quality is maintained, accredit training institutions and create a construction code.
The Act ensures that the board composition is as wide as possible taking care to ensure that most stakeholders are included as members of the board. Board members include the permanent secretaries from the ministries of public works, roads, local government, treasury and housing. Representation from professional bodies is also ensures as the board must also include representatives from the architectural, law, quantity survey and engineering professional bodies.
The board is further comprised from a representative from the Kenya Federation of Master Builders as well as The Kenya Association of Building and Civil Engineering Contractors. The Minister shall also nominate two members from two associations with a special interest in the construction industry…this may include interior architects.
All contractors must be registered under the Act and it is an offence to carry out any construction works without registration. Contractors include those doing any construction works as well as suppliers of material &labour. However, small constructions like construction of residential homes are not catered for in the Act.
When it comes to protection of the local industry from unfair competition, no foreign entity can carry out construction works in Kenya without obtaining the necessary license and regulatory approval. The minimum requirements before one can be granted a license are very stringent as the foreign contractor is licensed for only a specific period and also once they satisfy the board that they are in Kenya for only that specific project.
The foreign contractor must also produce a certificate of compliance. Furthermore they must lodge an affidavit with the NCA that once the project for which they have been licensed is over, then they shall wind up their business and not engage in construction within Kenya.
The Board has powers to investigate contractors. Any person may lodge a complaint against a contractor and the board may investigate any such complaints. The Authority may either suspend the member or delete its name from the register.
Also of interest to contractors is that they may be required to part with as much as Kshs. 25,000 for a contract worth 5 million as the Minister may elect to charge a levy known as a c construction levy to contractors at an amount not exceeding 0.5% on every contract that exceeds 5 million shillings. This means that the construction levy is on a graduated scale…the more you make the more you may be required to part with.
The Act is welcome, perhaps the only losers in this are the quacks and the unqualified contractors.
Mputhia is an Advocate with MuthogaGaturu. email@example.com, www.mgadvocates.com