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KONZA TECHNOLOGY CITY

where Africa’s silicon savannah begins...

SUMMARY DOCUMENT
April 2011

3
where Africa’s silicon savannah begins...

Prepared by:

Pell Frischmann with support from


Hamilton Harrison & Mathews, Nairobi

Summit Strategies Limited, Nairobi


CONTENTS

i INTRODUCTION 2 4 ENVIRONMENT 19
4.1 Water Sourcing
ii THE VISION 4 4.2 Waste Management
2.1 Masterplan Considerations 4.3 Impacts on Protected Migratory Species
2.2 Infrastructure 4.4 Uncontrolled Influx Magration
2.3 Transport Strategy - Summary 4.5 Social Impact
2.4 Strategic Environmental and Social
Assessment Executive Summary 5 PHASING 22

1 MASTERPLAN 6
6 ECONOMIC ASSESSMENT 24
1.1 The Site
1.2 Masterplan Concept
7 LEGAL FRAMEWORK 27
1.3 Key Features of the Plan
7.1 Institutional and Regulatory Framework

7.2 Land Acquisition and Development
2 TRAFFIC AND TRANSPORTATION 12
7.3 Project Development

7.4 Incentive Framework
3 INFRASTRUCTURE 14
7.5 Other Relevant Issues
3.1 Water
7.5.1 The East African Common Market
3.2 Wastewater
7.5.2 Data Protection
3.3 Storm Water
3.4 Telecommunications
3.5 Power
3.6 Solid Waste
3.7 Summary Analysis of Infrastructure

VIP SUMMARY CONTENTS 1


KONZA TECHNOLOGY CITY
i
INTRODUCTION

2
Introduction

The Government of Kenya are to sponsor the The following synopsis provides details of the
development of new-town catalysts, to launch East Masterplan, Economic Assessment and Legal
Africa into Global Business Process Outsourcing. framework prepared by international consultants. The
Building on a rapidly expanding demand for providing project plan explains how key service provision for
international top quality financial and business infrastructure and development design will be used
process services, this undertaking will harness talent to construct a state-of-the-art 21st century exemplar
from a strong well-educated and highly competitive city – Konza Technology City. Driven by commercial
local work force. technology services the site will also be home to
Kenya’s Financial City initiative, provide University
and Science Parks, potentially house government
ministry relocations from nearby Nairobi and establish
a modern living community which attracts high calibre
professionals to a modern life style.

VIP SUMMARY INTRODUCTION 3


KONZA TECHNOLOGY CITY
ii
THE VISION

4
The Vision

Kenya’s Vision 2030 aims to improve the quality of life


for the citizens of Kenya by transforming employment
markets, enhancing social infrastructure and securing
good governance. Konza Technology City embodies
this thinking. Designed to be a beacon of excellence
for not only Kenya but all of Africa, the city represents
an ambitious vision of a modern, inclusive and
sustainable Kenya. Konza Technology City is based on
successful new town projects around the world and
draws on international best practice to ensure global
competitiveness.

VIP SUMMARY THE VISION 5


KONZA TECHNOLOGY CITY
1
MASTERPLAN

6 PREAMBLE VIP SUMMARY


KONZA TECHNOLOGY CITY
Masterplan

The 2,000 hectare city will be located on a greenfield


site 60km south of Nairobi. It is already a location with
excellent transport and communication links. The A109
Highway connecting Nairobi with Mombasa runs adjacent
to the site, the mainline Konza rail station is less than
4km away and Jomo Kenyatta airport is under 50km.

B9

A2
MARSABIT

Kenyan Context
A1

KENYA
Nairobi
B1

60 km Jomo Kenyatta
Airport

A3
NAKURU
50 km
B3

JOMO KENYATTA
NAIROBI AIRPORT

B7
KONZA
EMALI

Local Context
A1
09
M A10
o 9
m
ba

MOMBASA
sa
R oa
d

Konza Technology City

Planned High Speed Rail Link


to Nairobi and Airport
4km

To Mombasa

VIP SUMMARY MASTERPLAN 7


KONZA TECHNOLOGY CITY
1.1 The Site
The site is relatively flat and is crossed by two seasonal
watercourses, both of which feed into the Stony Athi.
To the east and west there are hills that are locally
distinctive landmarks. The existing use of the site is
marginal agricultural land and unused land forming part
of the Black Cotton plains.

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KONZA TECHNOLOGY CITY
1.2 MasterPlan Concept
The commercial engine of the new city will be a cluster
of technology businesses, financial services firms and
other enterprises. Konza will be developed with world
class infrastructure, especially ICT infrastructure, which
will enable firms located there to compete on a global
stage.

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KONZA TECHNOLOGY CITY
1.3 Key features of the Plan are:
• A radial road structure with the public transport • The residential community occupies much of the
roads (shown in red) providing the preferred means remaining areas of the proposed Technology City.
of access to all parts of the proposed city. This will provide accommodation for employees and
their families who will work in the BPO Technopark,
• A Central Business District (CBD) is proposed in the the CBD and in the various local community
heart of the city, easily accessible to all residents facilities. The residential community will include
and workers both by public transport, walking, appropriate provision for schools, health -care
cycling and by car. A modern city centre will include facilities, churches and mosques, play facilities and
high class shopping, sport, cultural and leisure sports facilities.
facilities as well as amenities like a district hospital.
• Green corridors are proposed along the alignment
• The city will also include safe, well designed of the watercourses which are protected in the
neighbourhoods, providing 35,000 new homes Plan. This will help to avoid flood risk to the new
for people working in the city. Schooling will be buildings and also provides additional open space.
provided for all age groups from pre-school to These could also serve as ecological corridors
university. through the site.
• The BPO (Business Process Outsourcing) • The Konza Road is proposed to be paved to provide
Technopark is split into two zones to the north and easy access for all vehicular traffic.
south of the CBD. These areas are easily accessible
to local residents expected to work there and also to • A “Greenbelt” control zone of approximately 2
employees living outside the Technology City. The km is proposed around the site to protect the
Technopark provides an attractive setting to attract setting of the Technology City and guard against
inward investment into this sector, in accordance the development of informal settlements on
with the Government’s Vision 2030. the boundary of the site; to reserve land for the
possible future expansion of the Technopolis; and
• The Science Park is envisaged to the south of the to institute rigorous control of development in
BPO Park. the area around the site. This area could also be
• A central park near the CBD is proposed to be laid designated as a Nature Conservancy Zone which
out as a public park, providing a green lung for the could be managed by Kenya Wildlife Services (KWS)
residents and workers. to minimise the impact of the new town on local
wildlife.
• A site for a university campus is shown to the north
of the CBD. This will provide an area for academic
buildings, student residences and sports and
leisure facilities for students. It is accessible to the
CBD and will assist in the cross-fertilisation of ideas
between the university and businesses on site.

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KONZA TECHNOLOGY CITY
Key
Site area University Campus

AD
Rivers Open spaces

RO
ZA
N
Roads Reserve site

KO
Landscaping Very High Density Residential
Water Features High Density Residential
Sewage Treatment Works Medium Density Residential
BPO Techno Park Low Density Residential
Central Business District Buildings
Science Park

A109 MOMBASA ROAD

0 250m 500m 750m 1km

VIP SUMMARY MASTERPLAN 11


KONZA TECHNOLOGY CITY
2
TRAFFIC AND TRANSPORTATION

12
Traffic and Transportation

The Masterplan development sets out a land use The Transport Strategy will encompass all modes
scenario which will be supported, integrated and (public and private transport) and all facilities (highway
realised through a high quality transport system. Konza network, traffic management systems, etc.). Key features
Technology City will contribute massively to the regional for the achievement of a high quality transport system
economic development and its modern transport are as following:
system will allow the city to function efficiently.
• Encourage the road widening of the A109 to be
The key aim of the Transport Strategy, which was extended from Machakos turn-off up to the site
developed in integration with the land use patterns in order to improve site accessibility by reducing
proposed for the Masterplan, is to propose a transport journey time and hence transport cost;
system which (i) meets travel demands to-from Konza
• Develop the road network on a hierarchical basis
Technology City and (ii) provides for the movement
and in integration with the Masterplan to a high
of people and goods in an efficient and sustainable
standard as there are no physical, land or property
manner.
boundary constraints;
• Develop strategic bus corridors which will inter-
connect the proposed development areas. The
strategic corridors should have as their focus the
proposed BPO and CBD areas and other facilities
proposed under the Master Plan. The corridors
should afford extensive priority to buses;
• Develop a comprehensive traffic management
programme (covering junction controls, signals,
channelisation, road marking, etc.), with particular
attention to be paid to parking policy; and
• Develop an Institutional Arrangement to set up and
operate the Transport Strategy.

VIP SUMMARY TRAFFIC AND TRANSPORTATION 13


KONZA TECHNOLOGY CITY
3
INFRASTRUCTURE

14
Infrastructure
The Konza site has little existing infrastructure and 3.1 WATER
presents what is essentially a “green field” site for
development. Whilst this might be perceived as a The demand for water has been based upon the
challenge, the lack of existing infrastructure represents proposed land use allocation and phasing, together
an opportunity to develop a fully integrated, modern with typical water consumption data for domestic,
infrastructure, designed specifically for the intended commercial, irrigation and other uses. Demand will
land use. Opportunities exist to incorporate sustainable be offset by the use of treated wastewater for certain
solutions for water recycling, energy recovery and waste irrigation uses. Allowances have also been made for
minimisation within the design, thus reducing the leakage and for daily variability in demand to give a
dependency upon raw resources and leading to a green forecast average supply requirement of 10 mega litres
eco-friendly development. per day (Ml/d) in the 1st Phase, rising to 34 Ml/d upon
completion of all forecast development. Rainwater
The location of the Technology City, beside the recycling may offer a means to further offset the demand
main Nairobi-Mombasa route, provides not only for potable water. “Greywater” collected from roofs may
excellent road and rail transport links, but also direct be stored and used for non-potable applications such
access to Kenya’s existing long-distance power and as toilet flushing and irrigation.
telecommunications transmission systems.
The proposed water infrastructure comprises a single
Perhaps the biggest challenge for the development will centralised water treatment works and an associated
be the incorporation of a suitable water source. The network of distribution mains. The water treatment
Konza region, in common with most of Kenya, has a works will be located to the north of the site to take
significant water deficit. Limited groundwater sources advantage of higher levels in this area and enable a
are available close to the site. Konza will need to be supply pressurised by gravity to most areas.
incorporated within a bulk regional water scheme
including the construction of new dams and pipelines to The scale and complexity of the water treatment
supplement and reinforce supplies from existing dams process will be dictated by the quality of available water
and water transfer schemes in the region. sources, land take has been provisionally estimated
as 10 hectares; based upon a conventional treatment
process comprising flocculators-clarifiers, sand
filtration, activated carbon and chlorination. The land
area includes treated water reservoirs to provide secure
storage of 1½ days’ supply.

The distribution mains will be divided into four supply


zones to enhance control, security and the phased
development of the site.

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KONZA TECHNOLOGY CITY
3.2 Wastewater 3.3 Storm Water
Wastewater will be collected in a network of sewers, The surface water collection system will be kept
separate from the surface water (i.e. rainfall) drainage separate from the wastewater sewers to prevent
system. The existing topography facilitates a gravity contamination of the rivers or dilution of the
driven sewerage system following ground contours wastewater. The network of pipes and large diameter
to a wastewater treatment works located at the drains will permit the rapid collection and discharge of
south-western corner of the development area. A surface water into the dry rivers which pass through the
pumping station will lift the wastewater at the inlet development.
to the wastewater treatment works, allowing a gravity
flow through the treatment stages and onwards to a Flood lagoons, placed at strategic locations on the
discharge point into the Stony Athi river. The proposed dry rivers, will control the rate of flow in the rivers,
site is also downwind of the major development improving flow efficiency and reducing the risk of
areas for both the summer and winter prevailing wind scouring in flood conditions.
directions.
3.4 Telecommunications
The wastewater treatment process proposed is waste
stabilisation ponds (WSPs), in line with current The Konza site is ideally placed for high speed, high
strategies for wastewater treatment at other large bandwidth communications, being adjacent to the
population centres in Kenya. This process utilises main route for long-distance fibre-optic cables between
long retention times and natural sunlight and oxygen to Nairobi and Mombasa.
achieve effective treatment of wastewater by removing
pollutants and killing pathogens. The treated wastewater Within the development itself, a state-of-the-art access
will be suitable for discharge to the river (subject to network will comprise four exchanges, linked by dual-
the necessary consents) or for reuse for irrigation of redundant fibre-optic networks, distributing outwards
certain crops and landscaped areas, which will reduce via star-configuration fibre-optic cables. This network
the development demand upon potable water. WSPs will offer a complete modern telecommunications
are particularly well suited to the Kenya climate and package of high-speed internet, telephony and video
offer a much more sustainable solution than alternative services.
power-intensive wastewater treatment processes such Kenya has a rapidly developing mobile telephone
as activated sludge. They are also extremely simple market with healthy competition and major investment
to build, operate and maintain, requiring a minimum by the major service providers. By involving the service
of equipment, and have a low risk of odour or noise providers in the development process, they can expand
nuisance. WSPs do, however, require a large area of their coverage to suit the needs of the Technology City.
land in order to provide the necessary retention times.
The land area required for the wastewater treatment
works has been estimated as 35 hectares for Phase 1,
rising to 50 hectares in future.

The sludge which accumulates in the ponds is removed


periodically, after draining. It provides a valuable source
of nutrients as an agricultural fertiliser.

Methane can be collected from the initial, anaerobic


stage of the WSP system. This gas can be used in
combined heat and power (CHP) engines to generate
electricity and provide hot water for local use.

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KONZA TECHNOLOGY CITY
3.5 Power 3.6 Solid Waste
The power demand for the site has been estimated The strategy for solid waste management is based
using international codes and standards and knowledge upon principles of sustainable development and the
gained from previous projects. The estimated total protection of human health and the environment by
demand for all development phases is 675 MVA. producing less waste and by using it as a resource
wherever possible. Sustainable waste management
It is proposed that the supply to the site will come aims to apply the ‘waste hierarchy’ of reduction, re-use,
from the 400 kV line proposed between Mombasa and recycling and composting (to use waste as a source of
Nairobi. A new 400/220 kV Main substation will be energy) and only disposing as a last resort.
constructed to connect the site to the grid. Additional
security of supply could be achieved through the The first stage is to move collected waste to strategic
provision of site based standby generation facilities, transfer stations and associated treatment system.
if required, although careful consideration of the The system will incorporate a mix of technologies
integration of these would be necessary in order to complementing each other to provide a range of
make appropriate and effective utilisation of these recyclates and products for use locally, along with the
assets. generation of energy and heat for local commerce and
housing. Efficient operation will ensure the quantities
Appropriate distribution substations, transformers and of wastes generated is collected, treated, processed
ring mains will be distributed across the site in order to and disposed of without being noticed by the general
adequately and securely meet demand. populace. Vital to this system and underpinning it is
the provision of a secure landfill site for the disposal of
residuals, the management of fluctuations in the waste
stream and to act as a buffer for process down time.

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KONZA TECHNOLOGY CITY
3.7 Summary Analysis of Infrastructure
Infrastructure Existing conditions Proposed strategy
Element
Water No existing infrastructure. Local Offsite major supply source, incorporated within a regional supply scheme. Central
water resources inadequate. water treatment works and reservoir storage.
Maximise water re-use and rainwater harvesting to supplement.
Wastewater No existing infrastructure. Centralised treatment works using waste stabilisation ponds.
Effluent reuse for irrigation. Sludge disposal to agriculture for reuse as a soil
conditioner.
Storm Water No existing infrastructure. Run- Comprehensive network of storm drains.
off flows to dry rivers.
Power No existing infrastructure on To obtain a 400kV dual supply to the site from an overhead line. This will be
the site. transformed to 66kV and 11kV at strategic points around the site.
Solid Waste No existing infrastructure. Identify suitable local site for landfill and collection points, develop commercial
incentives for recycling and reuse (Energy from Waste) and managed collections in
line with the integrated waste management philosophy.
Telecoms Good GSM coverage & fibre New fibre optic Access network, providing high speed internet, voice and video
optic cables nearby. connectivity.

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KONZA TECHNOLOGY CITY
4
ENVIRONMENT

19
Environment

A Strategic Environmental and Social Assessment However, the key generic challenges are shown below:
(SESA) has been undertaken based on the guidance
provided by the National Environment Management 4.1 Water sourcing:
Authority (NEMA) and International Finance Corporation
(IFC) to evaluate the impact of the proposed Konza The development has the potential to have several
Technology City, recommend appropriate mitigation and impacts on the water environment; positive impacts
assess legal and institutional aspects relevant to the include maintenance of the two existing water courses
impacts and risks. on site, maintaining natural drainage systems. The
project will include the development of infrastructure
The SESA is based on a master-plan for 80,000 jobs. which will increase water resources to the area and
It is proposed that this be increased to 175,000 jobs in will include water treatment facilities which will help
which case a revised assessment will be needed. maintain the area’s water quality.

A significant challenge however, is the large increase


in the demand for water resources; the area already
experiences water shortages with demand outstripping
supply. With no feasible on-site sources, water
will need to be sourced from offsite. Water supply
options will require a full EIA in order to determine the
environmental and social impacts of water extraction
-including those upstream and downstream of any
extraction location once determined.

4.2 Waste Management:


The development of the city will result in the creation
of large amounts of construction, commercial and
household waste, if this is not disposed of appropriately
then it could result in a moderate/large negative impact
on the environment in the form of air, ground and water
pollution.

The Konza Technology City should include the provision


of waste transfer, sorting and recycling centers and
measures for the promotion and education of workers
and residents in the means of reuse, reduction and
recycling of waste. Alternative means of waste disposal
other than conventional landfill should also be explored.

20 ENVIRONMENT VIP SUMMARY


KONZA TECHNOLOGY CITY
4.3 Impact on Protected Migratory Species: 4.4 Uncontrolled Influx Migration:
The current proposed development covers a land area A large indirect negative impact of the city will be
of 2,000 hectares providing a loss of habitat and grazing the potential for informal unregulated development
area and the displacement and disturbance of wildlife attracted to the area and the rapid development of
currently located on site. Migratory herbivores such as slums. This would result in further land take, pollution,
the wildebeest, zebra and antelope were identified on resource consumption etc associated with urban sprawl.
site during a site visit in July 2010. The development will This has the potential to have greater impact than the
result in the loss of usable grazing area for the migratory development itself due to the unregulated nature of
mammals from the Athi Kapati migratory corridor to the growth, and lack of pollution control measures and
west. The initial project included a 2 km buffer zone and waste facilities. This growth is likely to take place within
a set of measures designed so that while the choice the planned buffer zone, impeding the implementation of
was of development over biodiversity conservation, mitigation measures and significantly altering the initial
the potential negative impact was minimized. Should baseline data.
the revised Masterplan be taken forward a new EIA
assessing the impacts of the additional land area on 4.5 Social Impact:
migratory species will be required.
The project has potential significant long term positive
impacts in terms of providing direct job and training
opportunities as well as the stimulation of economic
activity in the surrounding area and the district as a
whole.

VIP SUMMARY ENVIRONMENT 21


KONZA TECHNOLOGY CITY
5
PHASING

22
Phasing

Konza Technology City is designed to allow phased


development which will permit rapid growth while
ensuring that the civic amenities and infrastructure
grow with the population’s needs.

Phase 1 Phase 3

Phase 2 Phase 4

VIP SUMMARY PHASING 23


KONZA TECHNOLOGY CITY
6
ECONOMIC ASSESSMENT

24
Economic Assessment
Market Demand

BPO ITO KPO CSO

Horizontals Most developed with local Emerging with software Activity in this space not Emerging with few
captive markets dominating development as key area significant if any and companies starting
– services include contact of focus targeting local and provide opportunity animation
centres and digitisation foreign investors
Verticals Banking Financial Service & Insurance
Telecommunications
Government developing a shared service platform, digitisation

Konza Technology City presents a promising opportunity The key focus areas of opportunity within the ITES
for Kenya to develop an alternative and complimentary are BPO, ITO, KPO and CSO as illustrated below.
path for economic development in line with Vision 2030 A key strategy to realise this goal include;
by exploiting ITES and IT Products in the ICT Park1. Konza
also provides an opportunity as noted in the comparator • To sell demand and only then sell talent and other
countries to transform the country into a knowledge infrastructure advantages. Availability of talent
economy. Thus, this is a policy driven initiative as and infrastructure provides a foundation but is
a tool for job creation, national transformation to not sufficient to excite investors. There exists
launch the country to new frontiers. Government will unexploited local demand, which will provide
aim to structure the project so as to recoup as much comfort to international actors.
as possible of this initial investment funding in later • To sell Konza ICT Park as a product of the Eastern
phases. African region for the world. This takes advantage
of the expanded East African Community market to
provide language variety e.g. French from Rwanda
and Burundi and the larger market access.
• ITES industry is people based and thus will drive
uptake at Konza by shifting people – Centre of
Excellence (COE) for Africa at Konza, affordable
housing in the Technology City for up to 20% of ICT
Park staff, mass transport system to Nairobi, low
cost of space, among others.

1
Note that the ICT Park is within the Konza Technology City. The ICT Park is
expected to be the focus of the first phase of development of the wider Konza
Technology City project together with some city amenities and residential
development that will support the ICT Park staff working during the day and
house a significant part of the ICT Park staff and their families over time that will
reside in the Technology City. Additional development of the city is expected to
take place as the ICT Park becomes established over time but such demand for
the wider city was not part of the ICT Park demand study.

VIP SUMMARY ECONOMIC ASSESSMENT 25


KONZA TECHNOLOGY CITY
With the strong government commitment as These figures are conservative compared with
demonstrated in the purchase of the 5,000-acre land for comparator countries and sites of Cyberjaya (Malaysia),
the City, the project could help generate 15,000 ITES/ Cyber City (Mauritius), Smart Village (Egypt) among
electronic manufacturing direct jobs (and 45,000 indirect others and the projections are inspired by early trends
jobs) nationally in phase 1 by 2015. Konza itself would of mature markets of India and Philippines. Recurring
host approximately 8,000 direct jobs by 2015. Revenue success factors in these comparator countries that
generated arising from Konza ICT activities would be inspire the design of Konza Technology City are;
US$ 244 million annually. In phase 2, the jobs created
nationally would rise to 39,000 direct jobs with half of • A very focused and visionary government
the direct jobs in Konza ICT Park. Konza ICT Park jobs commitment over the long term to give the private
are expected to generate US$ 607 million annually. By sector comfort through a proof of concept in the
2032 the national market would generate 349,000 jobs first phase of the project
(approximately 1million indirect jobs). Konza ICT Park is • Progressive inclusion of private sector to increasing
expected to host the bulk of the direct jobs while the take over some of risks
rest are in other private sector driven initiatives. Total
• Parks are increasingly generic in design and
revenue generated at Konza ICT Park is projected at US$
implementation, thus the differentiator is the value
5.4 billion by 2032. This market will initially be driven by
addition demonstrated through commitment and
regional demand and therefore Kenya can exploit the
a superior operating environment, strategic access
first mover advantage by positioning Konza ICT Park as
to other markets in the neighbourhood of eastern
regional product for the world.
African region, market insights, access to talent,
geopolitical stability macroeconomic stability
• A self-sustaining ecosystem within the City and
its neighbourhood comprising of Incubation,
Science Park, Research and Development, Centre
of Excellence and Universities

This is a long-term project and will be developed


through a sequenced approach with clear milestones
driven by a high-level champion to handhold and
transition the project into the future.

The government identified the need to establish Special


Economic Zones (SEZs) to cater for industrial activities
and requirements for agro-industrial, manufacturing,
Information and Communications Technology and Small
and Medium Enterprise (SME). The SEZ framework
will address key factors that enhance Kenya’s
competitiveness as an investment destination through
infrastructure provision, simplification of business
regulations, value chain integration and clustering,
expanded market access for SEZ goods and services,
and reduced taxation. SEZ will be a vehicle that may be
applied to enhance investment attractiveness at Konza
Technology City.

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KONZA TECHNOLOGY CITY
7
LEGAL FRAMEWORK

27
Legal Framework
Hamilton Harrison & Mathews (HH&M), as the legal 7.2 Land Acquisition and Development
transaction advisors to the project, carried out a legal
and regulatory framework review in order to identify the Pursuant to the provisions of the new Constitution, all
legal implications of all legislation and other pertinent existing land laws will be revised, consolidated and
laws on the project. The following were the key issues rationalized and this will significantly affect the manner
identified by HH&M: in which land in Kenya may be acquired, utilised and
disposed. For instance, under the new Constitution,
all public land (including land owned by the state or
Institutional and Regulatoryc
7.1
state agencies) will be vested in the National Land
Framework Commission. The Constitution further provides that
The Government intends to set up the project under public land may only be used or disposed in terms of
a Special Economic Zones (SEZ) program, currently an Act of Parliament specifying the nature and terms of
being formulated by an inter-ministerial team. HH&M that disposal or use. It is therefore necessary that the
reviewed the draft SEZ bill dated August 2009 and SEZ law grant express powers to the SEZ authority to
identified various deficiencies. We understand that dispose land acquired by it for SEZ purposes in such
these deficiencies are currently being addressed by manner as it may deem necessary in order to achieve
the inter-ministerial team but ultimately, the SEZ law the objectives of the SEZ law.
should provide an enabling institutional and regulatory
With regard to development of SEZ land, it will be
framework under which SEZs can operate. Key areas that
necessary to harmonize the physical planning laws and
need to be adequately addressed include:
the SEZ law to ensure that the objectives of the SEZ
i. the establishment of an autonomous regulatory policy are taken into account in developing regional and
authority with adequate powers and statutory local development plans and in granting development
functions necessary to implement the objectives approvals. It will also be important to harmonize the
of the SEZ law; roles of the different regulators involved in this process
(such as the local authorities, the physical planning
ii. a clear framework for the designation of SEZ land department and the Commissioner of Lands).
and development of SEZs which allows for private
sector participation;
iii. a transparent licensing regime that not only
encompasses a “one-stop shop” but also provides
tools to ensure harmony between the SEZ authority
and other regulators (such as CCK and KRA); and
iv. a suitable incentive framework that is not only
attractive to investors but also ensures that the
objectives of the SEZ program are achieved.

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KONZA TECHNOLOGY CITY
7.3 Project Development 7.4 Incentive Framework
The Government intends to develop the project under The SEZ bill proposes various procedural and fiscal
the PPP Framework. The existing PPP framework sets incentives. Some of these, particularly the fiscal
out an elaborate procedure for the approval of PPP incentives will need to be incorporated into the existing
arrangements (including approval by cabinet) and these tax legislation in order to bring them into effect.
have significant time and cost implications which will More importantly, it is important to bear in mind the
need to be taken into account in planning the project provisions of the multilateral treaties that Kenya has
schedule. In addition, the relevant decision makers will ratified, as these cannot be easily amended.
need to be satisfied that the project meets the overall
objectives of the PPP framework before approving the The other issue to bear in mind is that under the
proposed PPP arrangements. new Constitution, county governments may be able
to impose additional taxation over and above that
Regarding ownership of the project, it is possible for the imposed by the national government. In this regard,
Government to transfer the land and the development of the national government will need to educate county
the project to a separate entity e.g. a state corporation governments on the general objectives of SEZ program
incorporated under the State Corporations Act and the in order to ensure that the taxation policies established
Companies Act or a development authority incorporated at county level do not defeat the objectives of the SEZ
by statute. This entity can then, as a separate legal program. That said, it could be argued that the SEZ
entity, perform the role of developer or appoint a master program is a matter of national importance and to
developer, and in the future, be able to act as the that extent any laws passed at county level that are
‘landlord’ to charge levies and maintain standards of inconsistent with the SEZ law will be superseded by the
construction and maintenance of the developments. SEZ law.

The advantages of this are that a State Corporation can


be set up fairly quickly; the project can be run by an 7.5 Other Relevant Issues
autonomous body (although this will still be subject to
7.5.1 The East African Common Market
PPP law, procurement law etc.); the autonomous body
can have private participation in the future (by way The East African Common Market Protocol, which came
of shareholders, independent directors etc); and this into force on 1st July 2010, provides for free movement
body can be financially independent from Government of people, goods, services and labour within the East
(save for the shareholding or ownership of the body African Community (“EAC”). It is not clear how SEZs will
by Government). Further consultations and advice be treated once the Common Market Protocol comes
needs to be taken if this option is to be considered by into force. There will be need for amendments to the
Government Customs Union Protocol to make suitable provisions
relating to SEZs including import duties and market
access conditions and perhaps this is something that
the Government should begin engaging other EAC
member states in.

7.5.2 Data Protection


Kenya has no specific data protection legislation. The
absence of data protection legislation is something that
may discourage investment in the project and we would
recommend that suitable data protection legislation be
enacted in order to give investors confidence that the
privacy of their communications and transactions will be
adequately safeguarded.

VIP SUMMARY LEGAL FRAMEWORK 29


KONZA TECHNOLOGY CITY
www.konzacity.com

Permanent Secretary The CEO


Ministry of Information and Kenya ICT Board
Communications Telposta Towers, 12 Floor
Telposta Towers, 10 Floor Kenyatta Avenue
Kenyatta Avenue P.O. Box 27150, 00100
P.O. Box 30025, 00100 Nairobi,
Nairobi, Kenya
Kenya
Tel: +254 20 208 9061
Tel: +254 20 225 1152 Email: info@konzacity.com

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