Don’t sell; revive Nyayo Car firm

It is, indeed, intriguing that the parastatal that owns the multi-billion-shilling expensive equipment we purchased several years ago to build the infamous Nyayo Car is on the new list of state corporations on the chopping block under the latest privatisation plan.

It is an open secret that politically influential local steel makers have for a long time been intensely lobbying the government to allow them to either own or manage that little-known parastatal called Numerical Machining Complex Ltd (NMC).

I have correspondence from my archives which show that the Mwai Kibaki administration not only resisted the greedy merchants from snapping up this national asset on the cheap but attempted to come up with more viable solutions of exploiting it.

At one time, President Kibaki’s government attempted a joint venture with the Korean conglomerate and third-largest steel manufacturer in the world, Posco, to build an integrated steel mill on a piece of land in Athi River belonging to NMC. The plan was that NMC would be a local player and representative of the state in the partnership with the Koreans.

Partnership

In February 2011, a team of government officials that included representatives of the National Economic and Social Council and the Kenya Vision 2030 Secretariat travelled to South Korea to explore the potential of the partnership.

However, the deal did not see the light of day. Hardly a month ahead of a visit by a team from Posko, the land on which the steel mill was to be built was invaded by squatters. The project was undermined by a nexus between elements within the Kibaki administration and their allies within the local steel industry.

But the government did not drop the idea of using the NMC as the focal point to drive the country’s ambition to have an integrated steel mill. A local medium steel mill by NMC was made a Vision 2030 flagship project.

In 2010, then-Head of Public Service Francis Muthaura appointed the CEO of NMC, Sammy Onyango, to head a team of experts to conduct a baseline study on the quantities of iron ore deposits in the country. That study revealed that Kenya had adequate iron ore deposits for a medium steel mill in Taita, Meru, South Nyanza, Kitui and Mwingi.

The circumstances under which Mr Onyango—who had emerged as the leading champion of the steel mill project under the NMC—was unceremoniously booted out of office demonstrated the political influence the local steel makers lobby wielded under the administration.

At the close of business one Tuesday evening in August 2012, President Kibaki’s personal secretary Nick Wanjohi visited NMC and ordered the engineer out of office. Prof Wanjohi was a very powerful man then, being the only civil servant who served as a parastatal board chairman.

Here is a bit of history. Without a doubt, the Nyayo Car project was inspired by big ambition. The reason for its death was because greedy elites under the regime of former President Daniel arap Moi turned it into a kickback-motivated project that they used to open opportunities to scoop billions of shillings from inflated procurement deals and rents from the fake and dodgy commercial loans they committed the country to from fringe European creditors and banks.

Automotive parts

We purchased and installed from Denmark what was at the time touted as one of the largest foundries in Sub-Saharan Africa with the capacity to carry 200 tonnes of sand in its system at any given time. We also purchased a high-tech computer-aided machining complex capable of producing high-precision automotive parts. The equipment cost the taxpayer Sh1.4 billion at the prevailing prices in 1990.

The project died officially in 1993, after the government discontinued purchases of additional machinery for building critical plants for successful car manufacturing—such as assembly lines, pressing plants and forging machinery.

After abandoning the project, the government decided to incorporate a local company under the name Numerical Machining Complex Ltd to manage and take over the assets of the project and to provide commercial engineering services to local steel businesses.

Five prototype Nyayo Pioneer cars, which were launched with pomp and fanfare by President Moi in February 1990, were abandoned at an obscure corner within the former Kenya Railways workshop sheds, where NMC is located.

Unlike other parastatals, NMC was not established by an Act of Parliament: It was formed as a limited liability company under the Companies Act. To date, it has two shareholders—the Kenya Railways Corporation with a 51 per cent stake and the University of Nairobi with 49 per cent.

We should not be thinking about selling the company before exploiting a joint venture partnership with an international player in steel making. Kenya Railways owns tonnes of scrap. Why aren’t we considering the feasibility of getting NMC to start a small steel mill? Low ambition.

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