Tassia row headed for a messy ending

COTU Secretary General Francis Atwoli in a past meeting. Photo/FILE

What you need to know:

  • Mr Atwoli has also taken issue with the circumstances under which the huge project was awarded to China Jiangxi International (K) Ltd.

Cotu secretary-general Francis Atwoli has lit a fire under the multi-billion-shilling Tassia property development project planned by the National Social Security Fund (NSSF).

He contends that the board of the fund irregularly approved a variation of the price of the project from Sh3.3 billion to Sh4.6 billion.

Mr Atwoli has also taken issue with the circumstances under which the huge project was awarded to China Jiangxi International (K) Ltd.

On the other side of the argument are Labour Cabinet Secretary Kazungu Kambi, chairman of NSSF Adan Mohammed and the fund’s chief executive Richard Langat, who maintain that everything was done regularly.

I don’t know who to believe. Truth be told, these fellows are not thinking about the interests of the poor pensioner who is looking up to the NSSF for a reasonable retirement income in future. This controversy is about big money and the politics of big projects.

How I wish the interest of the pensioner and ordinary contributor who has been keeping his money with the NSSF in the belief that it will be invested prudently and wisely so that he can get a good lumpsum payment on retirement could be brought to the centre of this debate.

Indeed, what we should be debating here is whether the ordinary pensioner is likely to earn more from this massive project. On the face of it, all indications are that this project is going to be very very messy.

A bit of history is in order. The NSSF purchased the piece of land as far back as 1994 for a tidy sum of Sh 2.2 billion with the aim of developing the plots into residential and commercial properties as part of its investment portfolio.

In 2001, illegal squatters and land grabbers invaded the land claiming to have been sold the plots by land buying companies. In 2004, after spending hundreds of millions of shillings of pensioners’ money in litigation, the ownership of the project reverted to the NSSF.

Most of the plots were sold on a cash basis and the remaining on a tenant purchase scheme basis. Hundreds of millions of pensioners’ hard-earned savings have been spent on hiring surveyors and civil engineering consultants. Now, they want to spend a whopping Sh4.6 billion to develop roads and civil works.

Where is the interest of the pensioner in all this? Where is the evidence that a thorough feasibility study has been done to establish whether this project will add value to the pensioner? What is the internal rate of return on this massive project?

Mark you, the NSSF has completed not a single project of this magnitude without either massive variations in the cost of the project or protracted court cases where it is forced to pay hundreds of millions in litigation fees to contractors for little work done.

We remember the case of the Hazina Houses in South ‘B’. The Nyayo Estate Embakasi project was a total mess. The Silo parking project was a complete disaster.

In 2011, the NSSF retained the services of PricewaterhouseCoopers to conduct a fraud risk assessment on its tenant purchase schemes and other property development projects.

Known as “project fadhili”, its findings make the best case so far that all big property development and tenant purchase schemes inevitably lead to cases of corruption.

This article first appeared in The Business Daily

The government should move in and save the pensioner. The Tassia project will definitely grow into a grotesque scam.