Kenyan outsourcing tech park faces challenges
The Kenya government is planning to go ahead with the construction of an ambitious US$1 billion technology outsourcing park, even though property owners of the site have filed a case with the high court in Nairobi.
The case was filed after disagreements among the owners of the 5,000-acre site over government payments. Some of the shareholders allege that officials of the Malili Ranch sold the land without their consent.
The government agreed to pay $10.5 million to a company that was negotiating with Malili Ranch, whose shareholders are small-scale farmers. The shares in the company determine the size of the piece of land each farmer gets.
Farmers are now saying their shares in the company were bought cheap and not close to the figure that the government had offered. In the case, more than a half-dozen Malili Ranch shareholders allege their consent was not obtained when officials of the company sold the land.
The government was issued the title deed in December, but the farmers want the high court to block the government from releasing $7 million until the dispute is heard and determined. The government, meanwhile, insists that the land was properly bought and the title deed issued in accordance with the law.
Bitange Ndemo, permanent secretary in the Ministry of Information and Communications, addressed the ICT Industry Forum last week and said the government is hoping to start construction work by April. "The technology park will have high-speed Internet infrastructure, BPO park, science park, and a financial district," said Ndemo.
The forum, which was convened by the ICT industry to share ideas on what the park should provide for, was preceded by online discussions on what government priorities should be. "The government has been in negotiations with major outsourcing companies in India and the government is willing to provide the space and cater for the office rent for a year," added Ndemo.
Kenya is seeking to compete with South Africa, India, Mauritius, Malaysia and Philippines, the major outsourcing destinations. Lack of infrastructure, lack of tax breaks, lack of appropriate laws and the high cost of starting companies has made Kenya comparatively unattractive.