Ruto's Sh23bn Industrial Parks Project in Limbo as Senators raise red flags

President William Ruto’s Sh23.5 billion County Aggregation and Industrial Parks project has hit a major hurdle, with senators demanding its immediate suspension pending the development of a comprehensive master plan and feasibility studies across all counties.

The senators have also called for a parliamentary inquiry into the project to protect public funds, warning that the initiative risks becoming a white elephant unless serious gaps in planning, procurement, and implementation are addressed.

The lawmakers want the Ministry of Trade, which is spearheading the project in collaboration with county governments, to table a detailed report on the procurement process and name the contractors involved.

The County Aggregation and Industrial Parks (CAIPs) project is being co-funded by the national and county governments, with each level contributing Sh250 million.

Appearing before the Senate Trade and Investment Committee chaired by Kwale Senator Issa Boy Juma, Trade Cabinet Secretary Lee Kinyanjui was taken to task over the lack of due diligence before the project's launch.

Lawmakers questioned why feasibility studies were not conducted and counties not adequately consulted on their local needs.

Vihiga Senator Godfrey Osotsi raised a red flag over land ownership disputes, particularly citing his county, where the land earmarked for the park allegedly belongs to Kenya Railways.

He proposed that only the 13 counties that have completed the first phase of construction be allowed to proceed, while the rest of the project be paused.

“Treat these 13 counties as pilot counties and halt the process until we have a solid master plan and comprehensive feasibility studies for the remaining counties,” Osotsi said.

“What was the level of involvement of county governments in the procurement process?”

He emphasised that intergovernmental agreements are legally required when one level of government carries out functions meant for another, underscoring the need for formal oversight and accountability.

Kiambu Senator Karungo Thang’wa also criticised the rollout, saying that in some counties, the completed structures are “just empty halls with nothing inside.”

In response, Kinyanjui admitted that certain procedural steps had been skipped but defended the overall objective of the initiative.

"We acknowledge that some steps were omitted, but the broad conceptualisation of the project is sound,” he said.

“We are developing a master plan to guide future implementation and avoid repeating past mistakes.”

Kinyanjui added that reforms to improve procurement and oversight are underway to ensure better execution in subsequent phases.

So far, 16 counties—Busia, Bungoma, Nakuru, Trans Nzoia, Migori, Homa Bay, Siaya, Kisii, Nyamira, Meru, Garissa, Mombasa, Machakos, Uasin Gishu, Kirinyaga and Embu—have completed phase one of the parks project.

CAIPs are intended to boost value addition and investment in agriculture, livestock and fisheries by strengthening productivity along key value chains.

Apart from the 16 counties funded jointly by the national and county governments, 20 more counties have begun construction using their own budgets and have reported over 10 per cent progress, according to the ministry.

In the 2023-24 financial year, the national government allocated Sh4.7 billion to the project—Sh4.5 billion for construction and Sh200 million for project coordination and support.

However, a supplementary budget reduced the allocation to Sh4.5 billion. By the close of the financial year, only Sh1.152 billion had been disbursed, leaving a shortfall of Sh3.348 billion for phase one counties.

In the current 2024-25 financial year, the State Department for Industry has been allocated Sh2 billion—still Sh1.348 billion short of what's needed to complete phase one.

So far, total disbursements stand at Sh2.152 billion, including Sh1 billion sent in the first half of the year.

Under Article 3(a) of the Intergovernmental Agreement on CAIPs, the national government is expected to transfer Sh250 million to each county as a conditional grant for the construction of the parks.

To date, Sh2.03 billion has been disbursed to 13 counties. Kisii and Wajir each received Sh250 million; Kwale received Sh197 million; and 11 other counties—Migori, Meru, Embu, Busia, Bungoma, Machakos, Uasin Gishu, Garissa, Homa Bay and Kirinyaga—each received Sh133.3 million

INSTANT ANALYSIS

County Aggregation and Industrial Parks is a flagship project of President William Ruto's administration. The President has said the project aims to improve the incomes of farmers through value addition to the agricultural produce. This is besides creating jobs.