National Construction Corporation Act, Cap 493
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(Repealed by National Construction Corporation (Repeal) Act, No 2 of 1988)
LAWS OF KENYA
THE NATIONAL CONSTRUCTION CORPORATION ACT
CAP. 493
Published by the National Council for Law Reporting
With the Authority of the Attorney-General
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CHAPTER 493
The National Construction Corporation Act
Commencement Date: 1972-09-15
An Act of Parliament to provide for the establishment of the National
Construction Corporation to assist persons engaged in the construction
industry and for purposes incidental thereto and connected therewith
Short title.
1. This Act may be cited as the National Construction Corporation Act.
Interpretation.
15 of l985, s. 2.
2. In this Act, unless the context otherwise requires "appointed director" means a director appointed under paragraphs (a) and (b) of
subsection (1) of section 5;
"the Board" means the Board of directors established under section 5;
"construction industry" means the business of builders and general contractors, civil
and mechanical engineers, electrical contractors, plumbing and drainage contractors,
heating, ventilating and air conditioning contractors, steel erectors, excavators,
mining engineers, surveyors, quarry workers, builders of aqueducts, bridges, dams,
earthworks, roads, railways, waterways, waterworks, dock and warehouse
installations, and the carrying on of works and improvements of all kinds connected
with the foregoing;
"the Corporation" means the National Construction Corporation established by
section 3;
"director" means any person who is a member of the Board;
"managing director" means the managing director of the Corporation appointed
under section 6;
"Minister" means the Minister for the time being responsible for matters relating to
works;
"staff" means the officers and servants of the Corporation appointed under section
17.
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Establishment of National Construction Corporation.
Cap. 486.
Cap. 488.
3.(1) There is hereby established a Corporation to be known as the National
Construction Corporation, which shall be a body corporate having perpetual
succession and a common seal, with power to sue and be sued, purchase, hold,
manage and dispose of land and any other property and, subject to this Act, to enter
into such contracts as it may consider necessary or expedient for the purposes of
performing its functions under this Act.
(2) The Corporation shall not be subject to any of the provisions of the Companies
Act or the Banking Act.
Directions of Minister.
4. In the exercise of its powers and in the performance of its functions under
this Act, the Corporation shall comply with such general or special directions as the
Minister may from time to time issue.
Board of directors.
15 of 1985, s. 3.
5. (1) There shall be a Board of directors of the Corporation which shall
consist of (a) a chairman appointed by the President;
(b) not less than four nor more than six persons appointed by the Minister, in
consultation with the President, who in his opinion possess qualities likely to be of
benefit to the Corporation and of whom (i) at least one shall possess knowledge of accounting;
(ii) at least one shall possess knowledge of engineering;
(iii) at least one shall possess knowledge of building construction;
(iv) at least one shall be an advocate;
(v) at least one shall possess knowledge of banking;
(c) the Permanent Secretary to the Treasury;
(d) the Permanent Secretary to the Ministry for the time being responsible for
matters relating to industry;
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(e) the Permanent Secretary to the Ministry for the time being responsible for
matters relating to housing;
(f) the Permanent Secretary to the Ministry for the time being responsible for
matters relating to works; and
(g) the managing director appointed under section 6:
Provided that a Permanent Secretary may depute in writing any other person to be a
member of the Board of directors in his place.
(2) The Board may co-opt to serve on it for such length of time as it thinks fit any
number of persons whose assistance or advice it may require, but a person so coopted shall neither be entitled to vote at any meeting of the Board nor be counted as
a member thereof for the purpose of forming a quorum.
(3) From among the members of the Board a vice-chairman shall be appointed by
the Board who, in the absence of the chairman, may exercise all the powers and
perform all the duties of the chairman.
(4) An appointed director shall hold office for such period, not exceeding three years,
as may be specified in the instrument of his appointment but he shall be eligible for
reappointment.
Appointment of managing director.
6. (1) There shall be an officer of the Corporation, to be known as the
managing director, who shall be appointed by the Minister and shall be responsible
for the execution of the policy of the Corporation and for the control and
management of its day-to-day business.
(2) The Corporation shall delegate to the managing director such of its functions
under this Act as are necessary to enable him to transact effectively the day-to-day
business of the Corporation.
(3) In the event of the managing director being absent on leave or being
incapacitated by sickness or other cause, the Corporation, with the approval of the
Minister, may appoint a person to act as the managing director during the period of
absence or incapacitation, and the person so acting shall exercise all the powers and
perform all duties of the managing director under this Act.
Disqualification of appointed directors.
8. (1) No person shall be an appointed director if he (a) is insolvent or has conveyed or assigned his property or has made a composition
or arrangement for the benefit of his creditors; or
(b) is of unsound mind; or
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(c) has been sentenced by a court to imprisonment, for a term of six months or
more, within the preceding five years.
(2) If the Minister is satisfied that an appointed director (a) has become subject to any of the disqualifications specified in subsection (1); or
(b) is incapacitated by reason of physical or mental illness; or
(c) has been absent from two consecutive meetings of the Board without the leave of
the Board; or
(d) is otherwise unable or unfit to discharge the functions of his office,
he may revoke the appointment of that appointed director.
Remuneration and expenses.
15 of 1985, s. 6.
9. (1) Every director (who is not a public officer), the managing director and
the staff shall be paid out of the funds of the Corporation such remuneration as the
Board, in consultation with the Treasury, may from time to time determine.
(2) The Corporation may pay such travelling and other expenses as may be
reasonably incurred by members of its Board of directors or the managing director
and the staff by reason of their office and in accordance with the rates and scales
approved by the Government.
Meetings of the board.
10. (1) A meeting of the Board shall be convened by the chairman at least
four times in every year.
(2) The chairman may at any time convene a special meeting of the Board, and shall
do so within one month of the receipt by him of a written request signed by at least
three directors.
Committees.
11. The Board may appoint committees, whether of its own members or
otherwise, to carry out such general or special functions as may be specified by the
Board, and may delegate to any such committee such of its powers as the Board
may consider necessary.
Procedure at meetings.
12. (1) In the absence of the chairman from any meeting of the Board, the
vice-chairman shall preside, and in the absence of both the chairman and vicechairman the directors present shall elect one of their number to preside, and such
member shall, as concerns that meeting, have all the powers of the chairman under
this Act
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(2) At every meeting of the Board the person presiding shall have a casting as well
as a deliberative vote.
(3) The quorum of the Board shall be four, and all acts, matters or things done or
authorized or required to be done by the Board shall be effective only upon the
resolution of a majority of the votes cast by the members present and voting at a
meeting at which a quorum is present.
Declaration of interest.
13. (1) A director who is in any way directly or indirectly interested in any
loan made or proposed to be made, or any contract entered into or proposed to be
entered into, by the Corporation or by any person in which the Corporation holds an
interest, which is brought up for consideration by the Corporation, shall, as soon as
possible after the relevant circumstances have come to his knowledge, disclose the
nature of his interest at a meeting of the Board, and such disclosure shall be
recorded in the minutes of the Corporation, and that director shall take no or no
further part in any deliberation or decision of the Corporation with respect to such
loan or contract:
Provided that (i) the failure of any director to comply with the provisions of this subsection shall
not affect the validity of any proceedings of the Board; and
(ii) a general notice, given in writing at a meeting of the Board, by a director, that he
is a member of a specified body, company or firm, and that he is to be regarded as
interested in all transactions and deliberations connected therewith, shall be a
sufficient declaration of his interest if it is duly recorded in the minutes of the
meeting at which such notice is submitted.
(2) A director shall not take any part in the deliberation or decision of the Board
upon any application for a loan made by a person who is (a) related to him within the third degree of affinity or consanguinity; or
(b) a debtor, creditor, partner or employee of his; or
(c) a debtor of any body, company or firm by whom that director is employed or in
relation to which that director has any official capacity whatsoever.
(3) A director who contravenes any of the provisions of this section shall be
Authentication of documents.
15 of 1985, s. 7.
14. (1) The common seal of the Corporation shall be authenticated by the
signature of the chairman or vice-chairman together with the signature of the
managing director, or some other person or persons duly authorized by the Board in
that behalf.
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(2) The Corporation shall maintain a register for making entries regarding the use of
the Corporation's seal.
(3) All documents made by the Corporation, other than those required by law to be
under seal, shall be executed and all decisions of the Corporation shall be signified
under the hand of the managing director or any other person authorized by the
Board.
(4) Any contract or instrument which, if entered into or executed by a person not
being a body corporate would not be required to be under seal, may be entered into
or executed on behalf of the Corporation by any person having the special or general
authorization of the Board for that purpose.
Functions and powers of the Corporation.
15 of 1985, s. 8.
15. (1) The functions of the Corporation shall be to promote, assist and
develop the construction industry.
(2) The Corporation shall, subject to the provisions of this Act, have power to do all
such things and to enter into all such transactions as it considers necessary for, or
conducive or incidental to, the performance of its functions under this Act.
(3) Without prejudice to the generality of subsection (2), the Corporation shall have
power to (a) engage in the construction industry;
(b) manufacture, process, assemble or deal in plant, tools, materials, machinery and
equipment used in connection with the construction industry;
(c) establish, equip and maintain educational and training establishments for the
benefit of persons employed or to be employed in the construction industry;
(d) furnish managerial, technical and administrative advice;
(e) enter into partnership with, or acquire the whole or any part of the interest in,
any company or firm;
(f) invest money after consultation with the Treasury in any funds which, for the time
being, trustees are authorized by law to invest, and to place money on interestbearing deposit with any public body;
(g) award contracts through a Works Committee consisting of two members of the
Board, and the managing director.
Directors not to be personally liable.
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16. Save as expressly provided by any other written law a director shall not
be held personally liable for any act or thing done or omitted to be done by him in
good faith and without negligence in the course of his duties as such director.
Appointment of staff.
15 of 1985, s. 9.
17. (1) The Board may, upon such terms and conditions as it thinks proper,
appoint such officers, servants and agents as it considers necessary or desirable for
the efficient conduct and operation of the Corporation.
(2) Every member of the staff shall, subject to the provisions of this Act, exercise
such powers and functions and perform such duties as may from time to time be
assigned to him by the managing director.
Provision of pensions, etc.
15 of 1985, s. 9.
18. The Board may, subject to the approval of the Minister and of the
Treasury, provide for the managing director and staff of the Corporation by means of
insurance, pension, superannuation or provident funds or otherwise, pecuniary
benefits upon leave, retirement, death or termination of service, or in the event of
sickness or injury, and such provision may be made either by contributory or by
noncontributory arrangements or partly by the one and partly by the ot
Reserve fund.
19. (1) The Board shall establish and maintain a reserve fund and shall pay
into such fund such part of the surplus moneys earned by the Corporation in the
course of its operations in any one year as the Board may determine.
(2) The reserve fund shall be applied by the Corporation in making good any loss or
deficiency which may occur in the course of the business of the Corporation.
(3) Any surplus moneys after deducting therefrom such sums as are required for the
purpose specified in subsection (2) shall be disposed of in such manner as the Board,
with the approval of the Minister and of the Treasury, may direct, but a prudent
balance shall at all times remain in the reserve fund.
Loan by Corporation.
15 of 1985, s. 9.
20. (1) The Corporation may authorize the making of a loan out of the funds
of the Corporation to any person engaged in the construction industry, upon such
terms and conditions as to security, interest and repayment or otherwise, and in
such manner, as the Board may deem fit.
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(2) The Corporation may, with the general or special written approval of the Minister,
authorize the making of a loan out of the funds of the Corporation to any director, or
to the managing director or to any member of the staff.
(3) The repayment of any loan made under the provisions of subsection (1) shall be
required within such period not exceeding five years as the Board may determine
and in every mortgage executed to secure such a loan there shall be implied on the
part of the mortgagor and in favour of the Corporation all the covenants and
conditions contained in the First Schedule which shall severally extend to and be
binding upon the successors in title of the mortgagor.
Borrowing powers.
21. The Corporation may borrow money on such terms and for such purposes
as may be approved by the Minister with the concurrence of the Treasury:
Provided that the Treasury may require the Corporation to execute a mortgage of its
property, and may impose such other conditions relating to security or otherwise as
is deemed necessary or desirable.
Accounts and audit.
Cap. 531.
22. (1) The Corporation shall cause to be kept proper books of account and
other books in relation thereto and to all its undertakings, funds, activities and
property, and shall prepare such other accounts as the Minister may require and, in
addition, yearly balance sheets made up to the end of its financial year, showing in
detail the assets and liabilities of the Corporation.
(2) The financial year of the Corporation shall be a period of twelve months ending
with a day to be determined by the Corporation with the approval of the Minister,
except so however that the first financial year of the Corporation may be a period of
less than twelve months ending with the first occurrence of the day so determined,
and, in the case of any alteration of that day, the duration of the financial year of the
Corporation as to which the alteration is first to have effect may be a period of not
less than six months or more than eighteen months ending on the new day so
determined.
(3) The Corporation shall appoint one or more persons qualified to be registered
under the Accountants Act (hereinafter referred to as the auditors) who shall
annually examine, audit and report on the accounts of the Corporation.
(4) The Corporation shall produce and lay before the auditors all books and accounts
of the Corporation, with all vouchers in support thereof, and all books, papers and
writings in its possession or control relating thereto, and the auditors shall be
entitled to require from all members, agents and staff of the Corporation such
information and explanation as may be necessary for the performance of their duties
as auditors.
(5) The expenses of and incidental to the audit shall be paid by the Corporation.
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Annual report.
23. (1) The Corporation shall, within a period of six months after the end of
its financial year, or within such longer period as the Minister may approve, submit
to the Minister a report of its operations during that year, and the auditor's report,
together with the yearly balance sheets and such other statements of account as the
Minister shall require; and the Corporation shall, if the Minister so requires, publish
them in such manner as the Minister may specify.
(2) The Minister shall lay the Corporation's report and the auditor's report, together
with the balance sheet and such other statements of account as he may have
required, before the National Assembly as soon as practicable.
Penalty for false statements.
24. An applicant for a loan under subsection (1) of section 20 who for the
purpose of obtaining the loan fails to disclose any information within his knowledge
which he knows to be material, or who makes any statement which he knows to be
false or does not believe to be true, shall be guilty of an offence and liable to
imprisonment for a term not exceeding three years, and upon the conviction of such
applicant any application made by him, and any arrangement or agreement entered
into by the Corporation with him, for the making of such loan may be revoked, and
any amount loaned by the Corporation in pursuance thereof shall become repayable
by the applicant forthwith.
Regulations.
25. (1) The Minister, after consultation with the Board, may make regulations
generally for better carrying out the provisions and purposes of this Act.
(2) Without prejudice to the generality of subsection (1), regulations made under
this section may (a) prescribe the procedure to be followed and the forms to be used in applying for
loans;
(b) specify the general conditions to be attached to loan agreements entered into by
or with the Corporation;
(c) provide for the registration of persons engaged in the construction industry.
Transitional provisions.
26. Notwithstanding any provision of this Act or of any other written law, the
transitional provisions set forth in the Second Schedule shall have effect for all
purposes from the date of commencement of this Act.
FIRST SCHEDULE
(s. 2)
COVENANTS AND CONDITIONS IMPLIED IN EVERY MORTGAGE
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1. That the mortgagor will from time to time, so long as money remains owing on this
security, pay the rent after it becomes due under any agreement or licence under which he
holds the chattels or land, and will well and substantially repair and keep in good and
substantial repair and condition all construction, plant or buildings upon the land; and that the
Corporation shall at all reasonable times be at liberty by its servants or agents to view and
inspect the said construction, plant or buildings by entering upon the said land.
2. That the mortgagor will not at any time alienate his interest in this security, or any part
thereof, whether by way of sale or gift or in any other manner whatsoever, without the prior
consent in writing of the Corporation, which consent shall not be unreasonably withheld.
3. That if the mortgagor fails or neglects to pay the rent as aforesaid, or to repair the said
construction, plant or buildings or keep them in good and substantial repair and condition as
aforesaid, the Corporation may, at the expense of the mortgagor and on his behalf, do all such
things as may be necessary to make good such failure or neglect.
4. That all moneys expended by the Corporation in paying rent or in repairing or keeping in
repair any of the construction, plant or buildings as aforesaid, or in the exercise of any power,
right or remedy herein contained or implied in favour of the Corporation, together with
interest at a rate not exceeding the rate charged in the mortgage, shall be a charge on the
property the subject of this mortgage.
5. That any insurance or licence shall be effected as may be prescribed or directed by the
Board in the joint names of the applicant and the Corporation; and that every policy of
insurance or licence so effected and, if required by the Board, every renewal receipt, shall be
deposited with the Corporation.
6. That if the mortgagor makes default in the payment of any instalment of principal or
interest or if the mortgagor makes any default in the due and faithful observance and
performance of any covenant or condition expressly or impliedly contained in the mortgage,
the Corporation may treat all principal, interest and other moneys for tile time being
outstanding under this mortgage as, and the same shall become, due and payable forthwith.
15 of 1985, s. 9.
SECOND SCHEDULE
(s. 26)
1. In this Schedule "the appointed day" means the day appointed under section 1;
"the company" means the day the National Construction Corporation Limited registered under
the Companies Act.
2. The Company shall be deemed to have been dissolved on the appointed day.
3. (1) On the appointed day all the funds, assets and other property, movable and immovable,
which, immediately before such day were vested in the Company shall, by virtue of this
paragraph and without further assurance, vest in the Corporation.
(2) Every public officer having the power or duty to effect or amend any entry in any register
relating to property, or to issue or amend any certificate or other document affecting or
evidencing title to property, shall upon request by or on behalf of the Corporation, do all such
things as are by law necessary to give final effect to the transfer of any property under this
paragraph.
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(3) No stamp or other duty, and no registration fee, filing fee or other fee of office, shall be
charged or become payable solely on account of any vesting of property effected by this
Schedule or on account of anything done under subparagraph (2).
4. On the appointed day all rights, powers, liabilities and duties, whether arising under any
written law (other than the Companies Act) or otherwise howsoever, which immediately before
such day were vested in, imposed on or enforceable by or against the Company shall, by
virtue of this paragraph be transferred to, vested in, imposed on or enforceable by or against
the Corporation.
5. (1) On and after the appointed day any action, suit or legal or arbitration proceedings
whatsoever, or any application to any authority, by or against the Company shall not abate,
be discontinued or be in any way prejudicially affected by reason only of any of the provisions
of this Act but the same may be prosecuted or continued by or against the Corporation, and
any judgment or award obtained by or against the Company and not fully satisfied before the
appointed day shall thereafter be enforceable by or against the Corporation.
(2) In any legal or arbitration proceedings concerning any right or liability transferred to or
vested in the Corporation by this Act, a certificate under the hand of the managing director
that such right or liability has been so transferred or vested shall be prima facie evidence
thereof.
6. Any reference in any written law, or in any document or instrument of any nature
whatsoever, to the Company shall, on or after the appointed day, be read and construed as a
reference to the Corporation.
7. All directions, orders, rules, appointments, requirements, authorizations and other things
given, made or done by the Company before the appointed day shall be deemed to have been
given, made or done by the Corporation.
8. Every person who was a member of the staff of the Company immediately before the
appointed day, and who is not then under notice of dismissal, shall on that day become a
member of the staff of the Corporation on the terms and conditions of service applicable to
him immediately before such day, and such employment with the Company and the
Corporation shall be deemed for all purposes to be a single continuing employment.
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