3. National Construction Authority Act, No. 41 of 2011

The law provides for establishment of the National Construction Authority (NCA), established under section 3 of the Act, which oversees the construction industry and supervising construction works.

Quick Link: https://new.kenyalaw.org/akn/ke/act/2011/41/eng@2022-12-31

· Other statutory functions of the NCA under section 5(2) are to: promote and stimulate the development, improvement and expansion of the construction industry; advise and make recommendations to the Minister on matters affecting or connected with the construction industry; undertake or commission research into any matter relating to the construction industry; prescribe the qualifications or other attributes required for registration as a contractor under this Act; assist in the exportation of construction services connected to the construction industry; provide consultancy and advisory services with respect to the construction industry; promote and ensure quality assurance in the construction industry; enforce the prescribed Building Code in the construction industry; encourage the standardization and improvement of construction techniques and materials; initiate and maintain a construction industry information system; provide, promote, review and co-ordinate training programmes organized by public and private accredited training centers for skilled construction workers and construction site supervisors; accredit and register contractors and regulate their professional undertakings; accredit and certify skilled construction workers and construction site supervisors; and develop and publish a code of conduct for the construction industry.

· Section 6 of the Act confers various powers on the NCA including imposing fees or any other charges as it deems fit in respect of any of its functions or powers; and facilitating, or promoting the establishment or expansion of, companies, corporations or other bodies to carry on any activities related to construction either under the control or partial control of the Authority or independently, both with the approval of the Minister.

· Section 15 of the Act provides for registration of contractors (both local and foreign ones) by prohibiting any person from carrying on the business of a contractor without being registered with the NCA Board under sections 17 and 18. It is an offence to carry on such business without registration. Importantly, contractors interested in undertaking works under select specialist subclasses such as electrical installations and telecommunication cabling also require licenses from the Communications Authority of Kenya (CA) and the Energy and Petroleum Regulatory Authority (EPRA). The Registrar of NCA keeps and publishes the list of registered contractors for public information under section 19.

· There are 8 categories/classes of contractors (NCA 1-8) depending on the complexity and value of a project to carry out classes of works set out in the Third Schedule to the Act. The classification and licensing is usually dependent on meeting the set evaluation criteria for contractors.

· A contractor is defined under section 16 to mean a person who for valuable consideration undertakes the construction, installation or erection, for any other person, of any structure situated below, on or above the ground or other work connected therewith, or the execution, for any other person, of any alteration or otherwise to any structure or other work connected therewith and undertakes to supply the materials or the labour necessary for the work. The Act, however, allows the NCA board to set a cost below which a person involved will not be deemed to be a contractor. Where the work undertaken comprises of a residential house for private use which does not require a structural design, the person involved is not deemed as a contractor.

· Section 22 allows the NCA board to institute an inquiry into the conduct of a contractor either on its own initiative or upon lodging of a complaint on allegations of unprofessional conduct.

· Section 23A of the Act provides that NCA shall undertake mandatory inspections at any time on sites under construction. In performing this role, NCA employs investigating officers appointed by the board under section 23 and who have power, at all reasonable times, to enter any construction site where construction works are being carried out and make such enquiry or inspection as may be necessary. The investigating officers may require the production of certain records, or put questions concerning the registration of any contract, the accreditation and certification of the skilled construction workers and construction site supervisors or the payment of levy. Such officers have powers to suspend all or any part of the works in respect of which the provisions of the Act have not been complied with until the time of such compliance. This provision was introduced through amendments to the Act in 2020.

· Section 31 of the Act provides that the Minister may through a notice in the Gazette impose a construction levy on construction work carried out by registered contractors, which levy shall not be in an amount exceeding an equivalent of 0.5% of the value of any contract value whose value exceeds five million shillings. Pursuant to the power to impose fees and charges, there was introduced a construction levy charged at the flat rate of 0.5% of contract value for projects whose value is above five million shillings that were commenced after 6th June 2014. The levy was later scrapped effective 1 January 2017 to lower construction costs and promote the affordable housing agenda.[1] However, NCA is now planning to reinstate the levy once more, following a decline in revenues to fund its operations.[2]

· Section 42 generally empowers the Minister to make regulations to govern various issues including: the Building Code in the construction industry; the manner of conducting mandatory inspections by the Authority; the fees and charges to be paid in respect of any matter; and the manner and forms of accreditation and certification of contractors, skilled construction workers and construction site supervisors; among other issues.

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[1] Business Daily, ‘Cabinet scraps all construction levies to ease home costs’ (Business Daily, November 22, 2016) <https://www.businessdailyafrica.com/bd/economy/cabinet-scraps-all-construction-levies-to-ease-home-costs-2132086 >

[2] Brian Ngugi, ‘Construction regulator backs return of building levy’ (Business Daily, June 09, 2022) <https://www.businessdailyafrica.com/bd/economy/construction-regulator-backs-return-of-building-levy-3842710 >