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Can Kenya handle too many mega projects at once?
GGK
#21 Posted : Wednesday, April 04, 2012 7:14:42 AM
Rank: Member


Joined: 11/21/2006
Posts: 608
Location: Ruiru
Cde Monomotapa wrote:
PPP

Meaning? Public Private Partnerships?
Difficult thing. The two go into with divergent mindset making it difficult to spurr synergies. Also too much suspicion in the air. I attempted one and it was nightmare
"..I am because we are. "― Ubuntu, Umtu,
mkeiyd
#22 Posted : Wednesday, April 04, 2012 8:02:01 AM
Rank: Veteran


Joined: 3/26/2012
Posts: 1,182
kyt wrote:
i think the most profitable venture for the country, is coal extraction. once we have cheap (affordable) and reliable energy, everything is smooth flowing.


Are you saying the pipeline to turkana and beyond is not viable? The Port? The refinery? When will they be viable if not now?
mkeiyd
#23 Posted : Wednesday, April 04, 2012 8:25:45 AM
Rank: Veteran


Joined: 3/26/2012
Posts: 1,182
eboomerang wrote:

...This is one of the real problems we have. A massive population and still growing but there is not any economic activity absorbing these people. Having big projects for the sake of it will not solve anything, we will just have a larger playing field for the problems.

We cannot all fit into the Oil industry or that Lamu port or even in the investment banking industry. All these are very specialized and require few people to make things work. For example, the envisioned port in Lamu or the one in Mombasa, if well automated like it should, you'd hardly have a headcount of 5000 people working there. Therefore even with an excellent new port, you may still have majority of the people in that region idle.

Usually a country needs one large industry that absorbs the masses. That is the role played by the automotive industry in the US, the software industry in India or the manufacturing industry in China. These are industries created for the masses, where labor as a factor is significantly required in large volumes.

I think our journey to a middle income economy will really begin when we identify that industry and begin to channel all our efforts towards making that industry grow, then the economy will absorb most of the idle people. Otherwise if we leave a large part of the population behind, we will continue to be pulled down by social-economic challenges.



Some valid points but i will disagree with you on some of your assumptions.
If oil industry is specialized, how about that software industry you mentioned in India? Ain't it specialized too?

If you look at each project in isolation, you get few numbers, because you ignore other support sectors,the connectors.
A port on its own, has a low head count, but how is it built? How do shipments arrive/depart at the port? The tourists on cruise ships?
Take the Singapore port, how many jobs does it create directly and indirectly?

When oil is pumped out, coal mined, making energy cost come down, then the disadvantage we be suffering of high energy costs won't be a worry.
That would bring in large manufacturers who have stayed out for all those years.The infrastructure dev'ts will lower transport costs,more business opportunities further away. More jobs.
Until now, most of the big car/electronics manufacturers have been pitching tent in Egypt ans S.A. With their well developed infrastructure,cheaper energy and enabling environment, they have been beating us hands down.
That won't be for long because we have the labor.
When you are poor[gov't] and lacking visionary leaders, its hard to be competitive.

About the point you raised of BoP, the energy related exploits will solve part of that, with a growing manufacturer sector doing the other part through increased exports.Resort City, more tourists money in.

Foreign investors take profits, the rest of the pie is consumed by the other factors of production. What Diageo/Coca Cola remit to their countries of origin is less than a quarter of what is spend here, locally.

All in all, these projects are not many and they will address the very issues afflicting us.

Lest we choose to be lazy.
eboomerang
#24 Posted : Wednesday, April 04, 2012 8:34:46 AM
Rank: Member


Joined: 6/27/2011
Posts: 301
Location: Nairobi
mkeiyd wrote:
kyt wrote:
i think the most profitable venture for the country, is coal extraction. once we have cheap (affordable) and reliable energy, everything is smooth flowing.


Are you saying the pipeline to turkana and beyond is not viable? The Port? The refinery? When will they be viable if not now?

I don't think that @kyt meant that those other Oil projects are not viable.

The point he/she could be trying to make is that most heavy industries require loads of energy and coal is still one of those sources of energy that is used for industrial purposes. Mainly due to the cheap production of coal and the volumes gained once mining of coal starts.

Oil, wind and nuclear maybe too expensive to use for industrial purposes. These energy sources have more viable applications in other sectors such as lighting etc.

For example you may not want to support a mining industry with Oil or nuclear, the costs to the business would be quite high and consequently the produced products would be expensive.

So I think @kyt does have a point, just that it was not expounded.
eboomerang
#25 Posted : Wednesday, April 04, 2012 10:30:38 AM
Rank: Member


Joined: 6/27/2011
Posts: 301
Location: Nairobi
mkeiyd wrote:
eboomerang wrote:

...This is one of the real problems we have. A massive population and still growing but there is not any economic activity absorbing these people. Having big projects for the sake of it will not solve anything, we will just have a larger playing field for the problems.

We cannot all fit into the Oil industry or that Lamu port or even in the investment banking industry. All these are very specialized and require few people to make things work. For example, the envisioned port in Lamu or the one in Mombasa, if well automated like it should, you'd hardly have a headcount of 5000 people working there. Therefore even with an excellent new port, you may still have majority of the people in that region idle.

Usually a country needs one large industry that absorbs the masses. That is the role played by the automotive industry in the US, the software industry in India or the manufacturing industry in China. These are industries created for the masses, where labor as a factor is significantly required in large volumes.

I think our journey to a middle income economy will really begin when we identify that industry and begin to channel all our efforts towards making that industry grow, then the economy will absorb most of the idle people. Otherwise if we leave a large part of the population behind, we will continue to be pulled down by social-economic challenges.



Some valid points but i will disagree with you on some of your assumptions.
If oil industry is specialized, how about that software industry you mentioned in India? Ain't it specialized too?
If you look at each project in isolation, you get few numbers, because you ignore other support sectors,the connectors.
A port on its own, has a low head count, but how is it built? How do shipments arrive/depart at the port? The tourists on cruise ships?
Take the Singapore port, how many jobs does it create directly and indirectly?

When oil is pumped out, coal mined, making energy cost come down, then the disadvantage we be suffering of high energy costs won't be a worry.
That would bring in large manufacturers who have stayed out for all those years.The infrastructure dev'ts will lower transport costs,more business opportunities further away. More jobs.
Until now, most of the big car/electronics manufacturers have been pitching tent in Egypt ans S.A. With their well developed infrastructure,cheaper energy and enabling environment, they have been beating us hands down.
That won't be for long because we have the labor.
When you are poor[gov't] and lacking visionary leaders, its hard to be competitive.

About the point you raised of BoP, the energy related exploits will solve part of that, with a growing manufacturer sector doing the other part through increased exports.Resort City, more tourists money in.

Foreign investors take profits, the rest of the pie is consumed by the other factors of production. What Diageo/Coca Cola remit to their countries of origin is less than a quarter of what is spend here, locally.

All in all, these projects are not many and they will address the very issues afflicting us.

Lest we choose to be lazy.

The point here is scale. The government needs some key industries to absorb all these idle people in a sustainable way.

Looking at the scale of the software industry in India. They have over 20 million software engineers based in India. Although India may not be a very good comparison due to its size, the number of software engineers is half the population of Kenya. Due to this large number of workers and the fact that most software projects are labour intensive at the low level, all major companies in that sector see it sensible to offshore a part of their operations to Bangalore in order to reduce their HR costs.

With regard to manufacturing in China, they have the infrastructure, they are also hoarding all rare earth metals (input factors) and they have the masses (labour). All these are the perfect ingredients for a functional manufacturing sector. The issue of rare earth metals is a key reason why China is here with us amongst other reasons.

If you have good infrastracture and you build resorts, the number of people you are giving employment per acrerage of land covered by the resort is rather small, we cannot provide employment to all Kenyans even if we filled the place with resorts.

The kind of traffic of people going to Industrial area every morning is the symbolic kind of absorption of the masses that we need but at a national level.

Hopefully with devolution, each county can create their own industrial area, of course all these needs to be coordinated by a proper national plan.
mkeiyd
#26 Posted : Wednesday, April 04, 2012 12:02:29 PM
Rank: Veteran


Joined: 3/26/2012
Posts: 1,182
eboomerang wrote:
mkeiyd wrote:
kyt wrote:
i think the most profitable venture for the country, is coal extraction. once we have cheap (affordable) and reliable energy, everything is smooth flowing.


Are you saying the pipeline to turkana and beyond is not viable? The Port? The refinery? When will they be viable if not now?

I don't think that @kyt meant that those other Oil projects are not viable.

The point he/she could be trying to make is that most heavy industries require loads of energy and coal is still one of those sources of energy that is used for industrial purposes. Mainly due to the cheap production of coal and the volumes gained once mining of coal starts.

Oil, wind and nuclear maybe too expensive to use for industrial purposes. These energy sources have more viable applications in other sectors such as lighting etc.

For example you may not want to support a mining industry with Oil or nuclear, the costs to the business would be quite high and consequently the produced products would be expensive.

So I think @kyt does have a point, just that it was not expounded.


How many of the coal plants for power are in S.Korea, Hong Kong, Singapore?

Coal just happens to be cheap without security issues.

UAE has transformed itself without relying on coal.

If you look at the big picture, all the projects are viable.
How do you suggest the raw materials and the final products from those heavy industry will be tran-shiped?
How do you think the cars from increased wealth will be fueled?

Look at the whole picture, don't isolate.
Cde Monomotapa
#27 Posted : Wednesday, April 04, 2012 12:46:45 PM
Rank: Chief


Joined: 1/13/2011
Posts: 5,964
GoK also contracts independent project managers.
mnandii
#28 Posted : Wednesday, April 04, 2012 1:42:18 PM
Rank: Elder


Joined: 10/11/2006
Posts: 2,304
eboomerang wrote:
mkeiyd wrote:
kyt wrote:
i think the most profitable venture for the country, is coal extraction. once we have cheap (affordable) and reliable energy, everything is smooth flowing.


Are you saying the pipeline to turkana and beyond is not viable? The Port? The refinery? When will they be viable if not now?

I don't think that @kyt meant that those other Oil projects are not viable.

The point he/she could be trying to make is that most heavy industries require loads of energy and coal is still one of those sources of energy that is used for industrial purposes. Mainly due to the cheap production of coal and the volumes gained once mining of coal starts.

Oil, wind and nuclear maybe too expensive to use for industrial purposes. These energy sources have more viable applications in other sectors such as lighting etc.

For example you may not want to support a mining industry with Oil or nuclear, the costs to the business would be quite high and consequently the produced products would be expensive.

So I think @kyt does have a point, just that it was not expounded.


Is this coal the Chinese interested in just meant for export(as raw material) OR do they plan to build a coal industry here.
Conventional thinkers waste time building shelters when they are unnecessary and then have no shelters when they need them the most. Socionomists do the opposite.
eboomerang
#29 Posted : Wednesday, April 04, 2012 1:58:32 PM
Rank: Member


Joined: 6/27/2011
Posts: 301
Location: Nairobi
mnandii wrote:
eboomerang wrote:
mkeiyd wrote:
kyt wrote:
i think the most profitable venture for the country, is coal extraction. once we have cheap (affordable) and reliable energy, everything is smooth flowing.


Are you saying the pipeline to turkana and beyond is not viable? The Port? The refinery? When will they be viable if not now?

I don't think that @kyt meant that those other Oil projects are not viable.

The point he/she could be trying to make is that most heavy industries require loads of energy and coal is still one of those sources of energy that is used for industrial purposes. Mainly due to the cheap production of coal and the volumes gained once mining of coal starts.

Oil, wind and nuclear maybe too expensive to use for industrial purposes. These energy sources have more viable applications in other sectors such as lighting etc.

For example you may not want to support a mining industry with Oil or nuclear, the costs to the business would be quite high and consequently the produced products would be expensive.

So I think @kyt does have a point, just that it was not expounded.


Is this coal the Chinese interested in just meant for export(as raw material) OR do they plan to build a coal industry here.

Who wants to take a guess?

All I can say is that we need to move away from the mentality that any foreign investor is here to "help" us, nothing can be further from the truth.

Follow the link to view the world coal consumption figures and you'll understand where their appetite for coal comes from, Link.

Before we can figure out how we can use the coal, it will gladly be finding its way to China.

It's not far fetched to think that government may have exchanged some of this minerals for the infrastructure the Chinese are building for us. China has used that kind of model in Angola; Angola's government is paying the Chinese with Oil.
mkeiyd
#30 Posted : Wednesday, April 04, 2012 2:12:49 PM
Rank: Veteran


Joined: 3/26/2012
Posts: 1,182
mnandii wrote:
eboomerang wrote:
mkeiyd wrote:
kyt wrote:
i think the most profitable venture for the country, is coal extraction. once we have cheap (affordable) and reliable energy, everything is smooth flowing.


Are you saying the pipeline to turkana and beyond is not viable? The Port? The refinery? When will they be viable if not now?

I don't think that @kyt meant that those other Oil projects are not viable.

The point he/she could be trying to make is that most heavy industries require loads of energy and coal is still one of those sources of energy that is used for industrial purposes. Mainly due to the cheap production of coal and the volumes gained once mining of coal starts.

Oil, wind and nuclear maybe too expensive to use for industrial purposes. These energy sources have more viable applications in other sectors such as lighting etc.

For example you may not want to support a mining industry with Oil or nuclear, the costs to the business would be quite high and consequently the produced products would be expensive.

So I think @kyt does have a point, just that it was not expounded.


Is this coal the Chinese interested in just meant for export(as raw material) OR do they plan to build a coal industry here.


Expound the above please.



Their mandate is specific, coal exploration/mining.
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