Bamburi Cement has called on the government to cut electricity prices by 50 percent to USD 9 cents per kilowatt hour, saying cheaper power would improve manufacturing competitiveness and help lower housing costs.
The company also wants cement used in Affordable Housing projects to be zero-rated for tax. It says power is a major input in cement production and that lower energy costs would reduce the final price paid by consumers.
Board Chairman Dr. John Simba said the firm had been examining ways to create savings that could support the country’s Affordable Housing agenda. He made the remarks during a forum that brought together middle to large contractors, private sector players and government officials.
“Cement in a typical high-rise residential building contributes approximately 10% of the total construction cost and a reduction in the cost of power and zero-rating tax on the commodity will significantly reduce the overall construction cost,” said Mr. Simba.
Chief Executive Officer Seddiq Hassani said Bamburi supports the government’s manufacturing and housing priorities, including the Big Four Agenda, under which the sector is expected to contribute 15% of Gross Domestic Product by 2022.
Hassani said the company’s affordable housing programme, known as Maskani, has been running since 2016 and had reached at least 5,000 households by the time of the report. He said Bamburi wants to expand that reach to 20,000 households by 2020.
The Maskani initiative provides home builders with architectural designs, bills of quantities, material schedules and on-site technical support. It also links borrowers to retailers of building materials and promotes alternative construction methods such as stabilized soil bricks for peri-urban and rural housing.
Hassani said the proposed tax and power changes would create meaningful savings that could be passed on to buyers and help advance the housing programme.
Principal Secretary Charles Hinga of the State Department for Housing and Urban Development urged contractors, raw material suppliers and jua kali artisans to innovate and find ways of reducing construction costs. He said the government had proposed amendments to several laws, including the Stamp Duty Act, Income Tax Act and Sectional Properties Act, to support affordable housing delivery.
Bamburi also said it had completed the expansion of its Athi River plant, where it built a new Sh4 billion production line. The project added 900,000 metric tons of annual capacity, lifting the plant’s total output to 2.4 million metric tons a year.
The company said the combined annual capacity of its two plants, NGP and Mombasa, would rise to 3.2 million metric tons.
