@eboomerang..
From the information available publicly on Konza, it seems it will be modeled and actualized following the Tatu City method.

In Tatu city, the developers bought the 2000 acre coffee farm from Socfinaf.

After buying, they zoned the land in several zones such that buyers into a specific zone will have to build houses as suggested e.g buyers into an educational zone have to build schools, buyers into an industrial zone build industries e.t.c

In such a model, 99.9% of the funds are spent in buying the land.
After buying and zoning the land, individual investors like you and me can now develop and use our own sources of money to construct.

Other models such as Thika Greens are slightly different in that the developer buys land and develops houses for sale to the public. In such a model,land becomes around 15 to 30% of the cost since actual construction takes the rest of the cost.

In Konza city, 99.9% of cost i.e buying land has already been done using tax payer money of KES 1B.

Investors will look for their own private funds to construct the universities, offices e.t.c within Konza.

The KES 800m that the Worldbank/IFC financial advisory to Ministry of Finance is mentioning will have to be explained in more details.

I dont understand where this money will be spent,who will be paid and who will repay it back.

Ministry of Info should give us the 800m breakdown.

Information available publicly is that Ministry of Info has hired Worldbank/IFC for Financial Advisory services.

Wordbank/IFC has in-turn hired London based Engineers/Architects.

LOCAL FIRMS.

If Ministry of Info hired KCB,CooP bank,Housing Finance as the financial advisors instead of Worldbank/IFC, and Otieno Odongo Engineers or Wanjohi Consulting Engineers or any Kenyan firm instead of the London based Engineers for the Infrastructure Engineering master planning services, the tax payer resources would largely remain in Kenya and more Kenyans will get empowerment and job opportunities.


Unless the debt will go into financing these consultancy services or infrastructure, am yet to see other need for 800m funding.

For infrastructure e.g roads, in well-planned projects, this cost is loaded into the cost of buying land such that it self-funds itself. If someone buys an acre for example, a part of this money goes into laying infrastructure.

To enable this effectively, the project is zoned into phases such that phase 1 profits fund Phase 2 hence no need of borrowing.

Zoning the project in phases also makes it easier and more cost-effective to lay infrastructure.

Another method is to lobby Government Ministry of Roads to use tax payer money to lay the infrastructure.

For banks to finance investors, they need to do so on land that has real intrinsic value as opposed to inflated value such that if someone defaults, banks can recoup their money through forced sale. Creation of this real value is mostly achieved through input of infrastructure.

Watch this video by John Perkins himself.

http://youtu.be/TFC18pFvo1g


On minute 22, he explains how Worldbank allows and funds projects that are not viable which are mostly conceptualized by Engineering firms.

Also,see this video on Wordbank and IMF operations.
Minute 13 to 16 explains in detail.

http://youtu.be/WYCH1Ylncxc


Ministry of info and their advisory team for Konza,Worldbank/IFC and the London based Engineers should come up with more concrete viability arguments.

The KES 800 Billion budget should be publicly displayed on their website for us to give our 2 cents.


http://youtu.be/TFC18pFvo1g

@ murchr.. both are viable as real estate projects.

One uses private sector funding and the other uses tax payer money to make the profit.

Tatu as a privately funded project does not pose any risk to tax payer and Kenya economy.

Konza as a taxpayer funded project needs to give more information to the public for scrutiny on its operations such as contracts with Worldbank/IFC and London based Engineers.

Check out this video here on Jamaica economy and Worldbank/IMF

http://youtu.be/e-ZE2L3_980

@ murchr.. both are viable as real estate projects.

One uses private sector funding and the other uses tax payer money to make the profit.

Tatu as a privately funded project does not pose any risk to tax payer and Kenya economy.

Konza as a taxpayer funded project needs to give more information to the public for scrutiny on its operations such as contracts with Worldbank/IFC and London based Engineers.

Check out this video here on Jamaica economy and Worldbank/IMF

http://youtu.be/e-ZE2L3_980[/quote]

I know all about the WB and its undertakings...but that happens where the locals have no involvement. If you read the papers a few months ago, the hitmen in the country were against the LAPSSET projects....u and i know the reason why. You are in the real estate business, so am sure u are well versed with the real estate sector.....IT is a diff industry the seed has germinated let it flourish.

This is not the first project that the WB is funding, it funded the Kazi kwa vijana prog....its funding the informal settlement improvement project, the northern corridor project etc....dont worry we have economists who can handle the project...we just need visionary politicians

First, its $8B secondly the project implementation will be done in 3 phases and is spread to the year 2030, third...when the proposal was submitted, the involved ministries (communication, finance and science and tech) were asked to look for land as to where they would want the project to be and they chose konza reasons best known to them, anyway we pay them for that. The land was acquired and will be sold cheaply to the investors.

Look at Konza city as an EPZ and not the way u see any other city in the country. If you listen to Prof Kiamba in his interview with jeff you might have some answers to your questions.

On land allocations, the Ministry wanted it to be on a first come first serve basis, but the AG wanted it to be on highest bidder, seems wamekuwa wengi, well....i don't know what they settled on. If you go to the Ps's office u shall get all the info u want, nothing is hidden

That is where ur missing the point. There will be a Konza Development Authority that will oversee the ownership and development of the city.

Now someone can write a thesis on this. I guess we have laws in this land and i said...this is not the first project that the WB has funded. I dont know the extend of the mandate of Konza dev authority but what i am aware they will be in control of what comes up in that area.

Remember the govts biggest role is to be an enabler of a conducive environment to do business

@ a4architect.com
I have been following your comments and those of a few others who are enlightened and am glad that you are creating awareness about this dubiuos project.

Slowly but surely will people awaken.

@L...Lets try and dissect Konza from a Jua Kali financial economist's point of view:

1.Ministry of Info buys land using tax payer's kes 1 b.
2. Ministry of Info advertises and hypes the said land.
3.Land price rises from kes 200k per acre to kes 4m per acre.If proper mechanisms in allocating the land are used, the high prices are recouped back to treasury=zero sum.

When someone buys land worth kes 1m at kes 4m, the 3m loss/difference is recouped/gained at treasury while he looses the 3m.
This is a zero sum to treasury/economy.

For a private sector project eg Tatu city, this 3m is termed as profit.

If no proper mechanism in allocation, treasury receives its initial cost minus running costs=negative sum.

The surplus is lost through corruption since investors will still pay market value unofficially, and reserve price officially.

People would have spent more on land that cant reciprocate in utility.The excess instead of being recycled into treasury, gets lost within corruption networks,most probably international,hence more damage to economy.

4.Land price is now high but no infrastructure to assist users recoup profits as in other towns/cities with existing infrastructure e.g Machakos,Kitengela and Nairobi hence productivity is lower in other towns.

5.High land prices without infrastructure lead to high cost of rent/houses/operating business.
6.High cost of houses/operations increases production cost.

7.High production cost reduces competitiveness hence investors loose out/make losses.

8.Investors cant make profits hence pay tax hence Govt looses out on tax revenue since its citizens are producing less.

My explanations above could be right or wrong on why in capitalist governments, govt should not compete with its citizens but i think the reason is that if it does, there will be a zero-sum to treasury.

A financial economist could explain better.

A country makes wealth by trading externally.

Konza city will make business sense by trading externally.
To trade externally, Konza city's costs of production are supposed to be as low as possible e.g China.

In Tatu city and other private sector real estate projects, the risks of loss to the economy are much lower/non-existent.Also, developer is more diligent while buying land to avoid losses when he cant find buyers.