Kenya delays production of potato and banana cold stores

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Kenya delays production of potato and banana cold stores

Kenya missed the December deadline to complete the construction of potato and banana cold storage facilities for Sh 300 million due to global supply chain challenges, a top official in charge of the project said.

Micro and Small Enterprises Authority MSEA said a subcontractor hired to supply cooling equipment pulled out of the deal, citing higher costs of importation than previously projected as a result of Covid-induced supply constraints.

In 2020 the government allocated 100 million dollars for potato cold storage facilities in Nyandarua and Meru counties as well as a banana cold store in Kisii.

The MSEA has set June as the new deadline for the project.

The construction of cold stores in the three counties is aimed at cutting the high post-harvest losses for potato and banana farmers under President Uhuru Kenyatta's plan to make Kenya a food secure country before his term ends in August.

We had expected to have finished this by December 31. The main buildings are 99 percent complete, but there are subcontracts for other things.

The cooling equipment is the most expensive part of the project, according to MSEA chief executive Henry Rithaa, who told Business Daily that the cooling equipment is the single most expensive part of the project.

The contractor that we had given could not deliver because of the Covid challenges where containers were not even coming in and escalating costs for importing the equipment. The contractor didn't give up the tender before doing anything and getting a cent from us. Covid-induced disruptions in global supply chains, especially at major ports in China and the US, increased shipping expenses by more than half last year, which has resulted in price pressures on firms.

The MSEA, the state-owned agency that is tasked with putting up the cold stores, said it had been awarded the tender for the supply of the refrigeration system for the Ol'Kalau facility in Nyandarua for Sh 29 million.

The bidders for Timau Meru and Kiamokama Kisii cold storage facilities were technically unsuccessful, prompting a re-advertisement with fresh bids undergoing evaluation.

The MSEA expects to have the cost of the equipment for the Meru storage facility similar to Nyandarua s with a cap of Sh 35 million, but sees higher costs for the Kisii facility for bananas.

The first evaluation did not yield anyone technically qualified, but even if they were to be technically qualified, they would still have suffered financially because the average quotation was about 60 million against a budget of 37 million, according to Rithaa.

We are trying to see if we can get additional funding and see if we can go to Sh 45 million budget-wise.

We can do six and start operating, instead of eight compartments, and hope we get more funding next year so that we can do the full scope.