• The accrued interest and penalties rising to Sh4 billion has become difficult for the authority to settle.
• LBDA chairman Odoyo Owidi said the mall which is 31 per cent occupied cannot manage to service the loan.
The National Treasury has been called upon to settle a loan from a local bank that was used to put up the Lake Basin Development Authority Mall in Kisumu.
LBDA officials expressed fear the loan interest and penalties from the bank will continue to increase if the matter is not urgently addressed.
While the principal loan taken from the Co-operative Bank for additional works was Sh2.5 billion, the authority said failure to repay the debt on time has attracted penalties.
The accrued interest and penalties rising to Sh4 billion has become difficult for the authority to settle.
The facility sits on 22 acres in Kanyakwar area along the Kisumu-Kakamega highway.
Since completion in 2016, the mall had been struggling to get tenants with business spaces unoccupied
LBDA chairman Odoyo Owidi said the mall which is 31 per cent occupied cannot manage to service the loan.
Owidi spoke during a meeting with principal secretaries who were in Kisumu on a two-day inspection tour of national government projects.
They included Jerome Ochieng (ICT), Ali Noor (Cooperatives), Joe Okudo (Sports), Alfred Cheruiyot (Post Training and Skills Development), Solomon Kitungu (Transport), Margaret Mwakima (Tourism and Wildlife)
Owidi appealed to them to lobby all government agencies renting private space in Kisumu to take up space at the mall to enable the authority to generate revenue.
He said the incomplete section of the Kisumu-Kakamega road and the ongoing corruption case on the project were some of the factors and reason a section of the mall has remained unoccupied to date.
However, the principal secretaries said a meeting will be convened between the National Treasury, LBDA and the banks to ensure the loans are cleared.
Ochieng said it was important for the matter to be urgently addressed as requested by the authority.
“We have to make sure that the government does not lose money in interests and penalties accruing from the loan,” he said.
He urged the authority to market the facility so businesses can take up space for the government to get value for the money pumped into the project.
Edited by Kiilu Damaris