Cotu has blown the lid on how top bosses at the NSSF manipulated processes to irregularly approve several projects worth more than Sh13 billion.
An audit report prepared by Ernst & Young has revealed that expected returns from the NSSF’s Sh6.7 billion Hazina Towers and Sh1.6 billion Milimani executive apartments were hiked during feasibility studies to make the projects appear viable.
Cotu hired the audit firm in 2016. Ernst & Young submitted the report to Cotu on September 14 last year.
The report says China Jiangxi, which was contracted for the Hazina Towers project, was allowed to submit two bids during the procurement process.
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The project consultant, Tana & Associates, also misled the NSSF Board to review the building’s upgrade from 24 floors to 34 floors, the report says.
The firm’s bids were for Sh6.2 billion and Sh6.5 billion. The tender committee eventually settled for the higher bid, which was later hiked to Sh6.7 billion.
Ernst & Young’s report also shows the NSSF started construction on the Sh4.6 billion Nyayo Estate phase six and Sh5.053 billion Tassia housing projects before obtaining approvals from government authorities. The Hazina Towers, Nyayo Estate and Tassia projects have stalled owing to various changes to their original plans.
Cotu secretary general Francis Atwoli yesterday told the Star the intrigues at the NSSF happened between 2013 and 2016 when he was fighting his removal from the pension scheme’s Board in court.
He said his return to the NSSF Board has helped contributions to the pension scheme to hit the Sh200 billion mark.
Atwoli says the EACC has failed to spring into action despite being presented with a copy of the Ernst & Young report. “The EACC supported us in the probe, but they sat on the report when the suspects are getting plum jobs. Some influential people want people at the NSSF who they can easily compromise for individual gains,” he said.
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Atwoli is Cotu’s representative on the NSSF Board, but has been fighting attempts by government to exclude the lobby from the pension scheme.
Proposed amendments to the Statute Law (Miscellaneous) Amendments sponsored by National Assembly Majority Leader Aden Duale have sought to kick out Cotu and the Federation of Kenya Employers from the NSSF Board.
But Kiminini legislator Chris Wamalwa has termed the plan unfortunate. “It is wrong for the government to try and kick out Cotu and FKF from the NSSF Board. The two represent the interests of workers and employees who are the key stakeholders of the NSSF,” the MP told the Star.
“Overstating the rate of return at 11 per cent with nine years payback period. However, the auditor recomputed it to 3.3 per cent with a payback period of 30 years. As at January 2017, the contractor had been paid 27 per cent of the contract sum (Sh2.51 billion) against 21 per cent of the work completed,” the report says on the Hazina Towers project.
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