Chinese firm seeks Sh6.9bn compensation from NSSF
This photo taken on March 12, 2014 shows stalled construction of Hazina Trade Centre in Nairobi. PHOTO | NATION MEDIA GROUP
What you need to know:
- The Public Works department is currently reviewing the contract claims and will present their report in two weeks time.
- The MPs resolved to write to the DPP and the EACC to immediately start investigations into the project.
A Chinese contractor has slapped the public pension service provider with a Sh6.9 billion compensation claim for the stalled construction of Hazina Trade Centre.
The claim made by China Jiangxi International was over and above the original contract price of Sh6.7 billion for the building owned by the National Social Security Fund (NSSF).
As a result, taxpayers are losing a whopping Sh20 million per week following stoppage of works after a suit was filed by the troubled supermarket chain, Nakumatt.
NAKUMATT
The project stalled after Nakumatt, the then anchor tenant, moved to court to block NSSF from constructing an extra 36 floors for loss of business.
The National Assembly’s Public Investments Committee learnt of the additional cost today when they toured the site in Nairobi’s central business district.
Data that was handed to Chief Quantity Surveyor at State Department of Public Works Alphonce Okweto today shows that the Sh20 million per week is composed of Sh1.7 million for extended preliminaries, Sh8.7 million on loss and expense due to head office overheads and Sh9.8 million on idle plant and equipment.
The data, prepared by Tana & Associates – the quantity surveyors and project managers – shows that the total claim based on extension of project time from the 94 weeks recommended by the architect stands at more than Sh1.8 billion.
REDUCED FLOORS
However, the Public Works department is currently reviewing the contract claims and will present their report in two weeks time.
Today, MPs told the NSSF management, led by its acting chief executive officer Anthony Omerikwa, that the public could not continue paying billions of shillings to a contractor for work not done.
“This is pure robbery with violence. I see a conspiracy between NSSF and the contractor to swindle taxpayers billions of shillings,” Kiminini MP Chris Wamalwa said.
Mr Omerikwa shocked MPs when he revealed that the cost of the new project, which has been scaled down from 36 to 15 floors, will not come down proportionately to the omitted floors because the project is based on an agreed bill of quantities.
“Due to some significant fixed costs, some of which have already been incurred, reduction is unlikely to be directly proportional to the number of floors omitted,” he said.
TENDER
He said NSSF could not terminate the contract without triggering litigation and incurring penalties as the delay was not due to the contract.
“Should the fund terminate the contract and tender afresh as demanded by MPs, the new tender would be based on current pricing and would be higher than the prices in the measured bill of quantities,” he said.
He told MPs that the contractor had already been paid Sh2.5 billion.
The project consultants – Mrutuu Salman & Associates, Tana & Associates, Abdul Mullick & Associates and Kisa &Partners/Metroeng – have been paid a total of Sh627.9 million.
The committee chairman, who is also Mvita MP Abdulswamad Nassir, said the team would not hold any more meetings with NSSF while the public continued losing billions of shillings.
“There is no need to continue with a matter that is not coming to a conclusion,” Mr Nassir said.
The MPs resolved to write to the Director of Public Prosecutions and the Ethics and Anti-Corruption Commission to immediately start investigations into the project, which he termed a cash cow.
