China Road and Bridge Corporation (CRBC) said on Monday it plans to buy over 5,000 tonnes of steel worth over 3.7 million U.S. dollars from Kenyan manufacturers for the construction of the Standard Gauge Railway.
CRBC Procurement Manager Zhang Chen said the purchase will be a first large scale local purchase of steel by CRBC since construction of the new railway began.
"We have tested the steel suppliers' steel products that are participating in this process in our SGR Project center lab and they have met the requirements for the project," Zhang said in a statement issued in Nairobi.
The firm has previously purchased smaller consignments from different Kenyan steel makers.
CRBC said the 5,250 tonnes of steel bars are expected to meet steel requirements for the construction of culverts and bridges foundation construction for about three months.
Kenya Association of Manufacturers (KAM) members were seeking ways of gaining from the construction of the high speed railway which is expected to create a local workforce of about 30,000.
CRBC is the main contractor of the 38 million U.S. dollar project. The first phase which beings later this year will see the railway built from Mombasa to Nairobi.
The project is expected to end in 2017. The second will extend that line from Nairobi to Malaba and Kisumu.
Already, Kenya is in talks with Uganda, Rwanda and Sudan to extend the lines for regional interconnectivity due to concerns that most of the cargo traffic will be from Mombasa to Nairobi, but not vice versa.
Kenyan and other East Africa Community (EAC) exports need to go through rail to create down traffic to the port and justify the project.
Zhang said five steel manufacturers on Friday presented their bids to supply the steel bars to CRBC at the firm's offices in Nairobi. CRBC will select one or more suppliers from their prequalified list of suppliers.
The company will now evaluate the quotations and will select a suitable supplier based on the stability of their production capacity, good sales performance, excellent quality control and lower price variations.
CRBC will evaluate the tenderer's business, service ability, quality proof and price stated in the bidding document. Eventually, one or several suppliers will be awarded the tender, said Zhang.
The companies that presented their bids are Apex Steel Mill Corporation, Steel Makers Limited, Devki Steel Mills, Prime Steel Limited and Tononoka Steel.
The companies said the local steel industry has adequate capacity to provide steel for the construction of the new railway while at the same time continuing regular supply to other local steel intensive industries.
The steel makers expect the railway to boost the industry by driving up demand for steel products.
Senior officials from the steel manufacturers have also allayed fears of shortage or spikes in the prices of steel during the SGR project construction phase.
They noted that the industry has in the past supplied steel to other mega projects in the country and East African region while at the same time servicing other local industries.
The 5,000 tonnes of steel is expected to meet demand for steel for a period of about three months. CRBC expects to undertake another round of procurement for steel towards end of this year.
Zhang added that the firm was keen on buying most of the materials used in the SGR project locally. Sourcing within Kenya has the benefits of availing materials to the contractor in a fast and efficient manner and at the same time contributing towards the growth of local Kenyan businesses.
"This project will play a critical role in the growth of different local industries. We have been paying close attention to local procurement of materials, except for rail and locomotive, materials such as cement, steel, fuel and ballast are sourced locally," Zhang said.
