The Beijing Damei Investment Company has announced its plans to build a mega city in Nairobi’s Athi River area at an estimated cost of Sh200 billion, deepening the World Power’s movess into Kenya’s construction sector.
The Chinese real estate group and construction giant, on Wednesday (March 20th) said the project called the Friendship City, will be modelled after the mega Chinese parks that also include homes, factories and amenities like hospitals, schools and shopping malls, all in one location.
Businessman Bobby Kamani said on Thursday, that the Friendship city, whose construction starts later this year, will sit on about 1,200 acres of land in Athi River. He also disclosed that he has shareholding interest in the multi-billion-shilling project through his Zuri Group of Companies.
The city will be able to host an estimated total of 150,000 Kenyans, who will live and work on site.
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According to Business Daily Africa, documents related to the project have revealed that The Friendship City will also have the status of a Special Economic Zone with a township and five separate functional parks within the property.
The project will attract an initial foreign direct investment into the country of approximately $2 billion (about 201 billion Kenyan shillings) with the potential of up to $7.5 billion (about $756 billion Kenyan shillings) by the time the entire development is complete. This is according to Jiannan Bao, the director of the Beijing-based Damei Investment Company.
Employment Opportunities
Mr. Bao also stated in documents for the project that “There exists the potential of direct employment of 150,000 people whilst indirectly employing close to 500,000 people, thus impacting over 2,000,000 lives,”.
The investors will enjoy tax breaks consistent with Kenya’s policy of Special economic Zone (SEZs).
“The major selling point of SEZs in Kenya is the tax shields offered within the confines of an SEZ. Particularly, from a tax perspective, SEZs are considered to be outside the customs territory of Kenya, thereby operating within a jurisdictional bubble that shields investors from taxes and similar regulatory hurdles that directly or indirectly impede trade,” said Mr Bao.
Several thousands of acres of agricultural land have in recent times been turned into satellite cities with the developers hoping to tap into the aspirations of Kenya’s growing middle class.
Kenya has been seeking partnerships with the private sector in order to develop housing units, as the country looks to meet a housing target of approximately 240,000 units per year.
The United Nations urban development agency, Habitat, estimates that more than half of Nairobi’s four million people dwell in slums.
A high demand for decent housing has seen developers conceptualise satellite cities such as Tilisi, Konza, Tatu City and Northlands.
Chinese companies have been the lead contractors in these and other multi-billion-shilling housing projects across the country, besides building hundreds of kilometres of tarmac roads as well as the Standard Gauge Railway between Mombasa and Naivasha.
Tatu City, which is already under construction, is expected to house an estimated 150,000 people on completion.
