The price of this market report covers 4 quarterly reports on this sector. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.Kenyas booming construction industry has faced significant headwinds, as rampant inflation - due to a weak shilling, among other factors - has seen building costs soar. Moreover, with the Central Bank of Kenya yet to show the commitment needed to support its beleaguered currency, we expect these price pressures to continue to make life difficult for the sector over the coming quarters, with the increasingly prohibitive cost of building materials and bank loans curbing demand for new developments. Our downwardly revised forecasts for the construction industry in 2012 reflects the deterioration of the economic picture, with real growth substantially eroded as a result. In light of this, we are now pencilling in real growth of 2.5% for construction industry value in 2012.
Key developments include:• The government has development plans with a total cost of US$22bn that include significant improvements to roads, railways, seaports, airports, water, sanitation and telecommunications. According to the Government, Kenya is focusing on these in the hope of attracting, accelerating and retaining investors who often complain its dilapidated facilities increase the cost of doing business, rendering Kenyas products uncompetitive in the global market
• The construction of the port of Lamu in northern Kenya has not yet begun, yet is already generating much interest. Having been mooted for years, it seems that construction of the port is to begin soon. The new facility at Lamu, which will cost US$5.3bn, will spread over 700 acres of land. The port will serve as the maritime entry point to the Lamu Port-Southern Sudan- Ethiopia Transport (LAPSSET) Corridor, which will include rail, road, oil pipeline and fibre optic cable connections with South Sudan and Ethiopia. The site will also be home to a new international airport. In total, price estimates for the multi-modal project range from US$16bn to US$23bn. A new high voltage transmission line linking Mombasa to Nairobi should provide much greater security of supply, transmitting electricity from the power rich coast to the electricity starved capital. The new 450km high voltage transmission line will have the capacity to handle 1,500MW of electricity, equal to Kenyas current installed capacity. The power line will allow electricity generated on the coast around Mombasa to be transported to Nairobi to feed the capitals electricity consumption. With a new 300MW coal power plant planned to be built around Mombasa it is hoped that the power line will help distribute this new electricity further up country.
• The decision by Kenyas National Environment Management Authority to approve the first phase of the US$5bn Tatu City development is an encouraging sign for the countrys residential construction sector as it seeks to meet rapidly rising demand.
Click for Report details:Kenya Infrastructure Report Q2 2012
