The National Construction Authority Act (NCA) was gazetted in December 2011 and the NCA Board inaugurated in July 2012. It was formed with the main aim of consolidating and creating a well regulated construction industry that will promote sustainable socio-economic development.
The creation of the Authority could not have come at a better time in the country especially now that that all sectors are geared towards Vision 2030. In order to achieve the goals and aims of Vision 2030, the construction industry is under pressure to restore some sense of order in the currently “free-for-all” sector.
Huge challenges abound in the Kenyan construction sector ranging from oligopolistic and monopolistic tendencies to unfair competition and substandard work especially amongst the small and medium-sized contractors. These, coupled with complications and irregularities in the procurement value chain, could eventually lead to stunted growth of the industry. As such, there was a need to tame the industry as well as shape it in the face of new and emerging challenges such as liberalization and increased foreign competition. The NCA is independent and, being a recognized legal entity, will have the capacity to sue as well as be sued as it takes on its responsibilities.
Who is in the NCA Board
The Board has 14 members composed of:
- Four members from professional bodies namely the Architectural Association of Kenya, Institute of Quantity Surveyors of Kenya, Institute of Engineers of Kenya and the Law Society of Kenya.
- Three members from contractor organizations namely the Kenya Federation of Master Builders, Kenya Association of Building and Civil Engineering Contractors and the Roads and Civil Engineering Contractor’s Association.
- Five members from government infrastructure ministries namely Principal Secretaries representatives of Ministry of Public Works, Roads, Housing, Local Government and Treasury.
- Two members from special interest groups.
Besides, NCA has an Executive Director competitively recruited by the Board to oversee the day-to-day management of the Authority. The first and current Executive Director is Architect Daniel Manduku.
Contractors, Requirements and Training
The Act covers virtually all construction works in the country including building and civil engineering works; electrical and mechanical engineering services all defined in the broadest sense. Both foreign and local contractors of whatever class have to be registered with the Authority and all construction works that commenced after the enactment of the Act also had to be registered.
The Act is a win for local contractors as some of its provisions serve as a protective mechanism against foreign entrants who tend to undercut their charges. The surge of foreign contractors into the Kenyan market as a result of bilateral agreements between the government and other countries has caused the market to be highly competitive therefore posing a threat for small-scale local contractors.
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, they shall wind up their business. This prevents them from engaging in any other construction in the country.
In addition, the Authority accredits all skilled construction workers, supervisors and training institutions.
Code of Conduct & Registration of Contractors
In its prefecture role, the Authority has to develop a Code of Conduct for the industry –a welcome relief in the face of the haphazard methodologies around. In light of the recent events relating to poor building practices and supervision, the Board will reign in on errant contractors and developers.
Under this role, the Board also regularizes the practice of foreign contractors and will not only set ownership structure but also limit their works to only tendered works. This means that a contractor without an ongoing contract cannot set up shop and will be required to wind up their contractual role has ended. It is noteworthy that the Board has an elaborate registration procedure which is and must be transparent. It also allows inquiries into de-registered names of contractors and an appeals board for those who feel that they have been dealt with unfairly. Contractors found on the offensive, will either be suspended or de-registered alongside other sanctions such as heavy fines.
The Board’s first task was to register all contractors under one roof and ensure relevant classes are given to each with regard to their capacities. This role was previously carried out by diverse ministries including Public Works, Roads, Energy, Water, and other bodies. Similarly, skilled employees under the contractors are required to have attained accreditation by the Board. This ensures that contractors employ properly certified staff hence ensuring high quality standard of works.
Research & Development
In view of the information age, the Board provides and coordinates training programs organized by the accredited centers for all construction industry workers. They are also faced with the onerous task of initiating and undertaking research in matters relating to the industry. The construction information system is continually updated for the benefit of the industry. It is expected to lower the costs of accessing information and create a near perfect market. The Board advises and makes recommendations to the relevant Cabinet Secretary on matters relating to the industry.
The Board is at the forefront in ensuring that the institutions and training centres provide quality education and will review, coordinate and promote learning among public and private institutions offering training to construction workers and supervisors. In fulfilling the important role of sustainable development, it aids in the exportation of services beyond the construction industry.
NCA Levy Fees
The NCA is an independent body corporate and has powers to levy fees as well as impose penalties on industry players in order to achieve its objectives. A construction levy of not more than 0.5% of the value of the construction works exceeding 5 million shillings is set to be a major source of income for the Authority. This means the construction levy is on a graduated scale; the more you make as a contractor, the more one pays. In addition, fines of up to 1 million Kenya shillings may be slapped on contractors guilty of contravening a provision of the Act.
Other funding sources are possible donations, research grants and concessional loans aimed at the construction industry. Government coffers also supply a stipulated amount as directed by the Treasury and parliamentary sanctions.