A Chinese firm wants the NSSF to pay Sh2.1 billion for a cancelled contract.
During a parliamentary committee hearing yesterday, acting managing trustee Anthony Omerikwa told the National Assembly’s Public Investment Committee the NSSF board was forced to terminate the contract after the Nairobi government declined to approve its plans to build houses in Embakasi.
He told the committee chaired by Mvita MP Abdulswamad Nassir the NSSF had already paid Sh215 million to China Jiangxi.
The firm was to build 324 units.
Omerikwa told the committee China Jiangxi, which is also constructing Hazina Towers in the CBD, had only built 52 units.
“In the initial plan, we had earmarked the area for construction of public utilities – two schools – but then we realised that the schools had been allocated much. We applied to Nairobi County government for a change of user, but they declined,” Omerikwa told the committee.
The members of the committee questioned why the board had not sought clearance from City Hall before signing the contract.
Nassir said it was wrong for the board to embark on the project without doing due diligence.
He said the committee will get to the bottom of the matter.
Omerikwa admitted the board erred and said it has stared regularising the process.
“We did not follow the due process and we are hoping that we will not get an objection on the change of user. I want to assure the committee that the process of tendering was open and there was no conspiracy to defraud the worker,” he said.
Auditor General Edward Ouko in his 2014-15 audit report said the advance amount paid to the contractor was done against a bank guarantee, which expired on September 30, 2015.
The terminated multibillion-shilling real estate project was to break ground in June 2013 and be completed in November 2014.
Yesterday, NSSF project manager Peter Muiruru told the committee the 52 completed units were to be sold at Sh5.5 million for one bedroom apartments and Sh12.5 million for three-bedroomed maisonettes.
Last month, tenants of the Sh450 million Hazina Towers expressed fear of losing their property following renewed efforts by NSSF to kick them out of the building.
They have obtained stay orders barring NSSF's auctioneers from evicting them from the nine-storey building.