VIEW POINT
Redundancy Tenants start defaulting as families which were previously well catered for start experiencing conflicts attributable to a lack of a steady income, which had accustomed them to a different lifestyle.
Irrelevant Projects similar to the SGR construction may not be undertaken in another 100 years and the skills the local labourers have acquired in the construction period could be rendered irrelevant.
Completion of the construction stage marks a significant shift from the labour intensive phase to highly mechanised operations. The maintenance phase of the project also has minimal need for manual intervention. Skills that were relevant now become redundant.
The high demand for goods and services wanes. Investors who had put up massive permanent dwelling units start experiencing low to no demand at all and are left with loans they are not able to service. Those who had acquired houses for speculative purposes are left staring at a bleak future.
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Completion of construction stage marks a significant shift from the labour intensive phase to highly mechanised operations and the maintenance phase of the project which has minimal need for manual intervention.
Were such a project to be extended to a different part of the country, political inclinations would dictate hiring of local labourers over migration of labourers from other areas.
A project company can however play a critical role in mitigating some of these negative consequences associated with post-construction phase. The company may sponsor training not necessarily related to the project but where the skills acquired can be applied in other ventures or enterprises. These could be skills in carpentry, welding, masonry, catering, tailoring.
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Diminished returns The mining industry experiences a boom and bust cycle due to international pricing of minerals. Consequently the goods and service providers experience diminished returns during times of low commodity prices.
In the recent past it was alleged that the fluorspar plant in the Rift Valley had to close shop due to dipping international prices. The closure had a profound negative impact on the local community’ s source of livelihood.
The entrepreneurs in Turkana who had acquired vehicles anticipating servicing the Tullow’ s oilfields felt the impact of low oil prices in the year 2015 and 2016 where Tullow scaled down the exploratory and development works so as to mitigate the decline in international prices.
Disposal Additionally, project developers operate a large fleet of vehicles. The disposal of assets and equipment after construction phase or closure of a project requires close scrutiny by the relevant authorities. Lack of a detailed plan on disposal of project assets such as motors may harm the sales of local car dealers for many years.
Though the enactment of the Local Content Bill may offer a solution to projects in the extractive industry in terms of planned labour, goods and service provisions it is silent on local content requirements for investors in other industries such as transport.
Additionally the Bill is detailed on absorption of goods and services during the project life but lacks post-construction transition strategy
36 WATTS UP MAGAZINE APR- MAY 2017