Nairobi MCAs have raised the red flag over the legality of contracts signed between City Hall and private developers of the urban renewal housing project.
The contracts are illegal because they were signed without being based on any housing policy, the MCAs said on Thursday.
Nairobi county assembly Planning and Lands committee says the county housing policy goes to its last reading next week and must be passed by the house.
Chairman Antony Kiragu was concerned that contracts for the project could have been signed illegally because they are not anchored in any law.
“At no point in the second session did the house pass or ratify that the county could do any transaction involving land. So the policy used to sign the contracts was not ratified by the assembly and so they are null and void,” Kiragu said.
Baba Dogo ward rep Geoffrey Majiwa blamed the developers for not doing comprehensive research to find out whether a policy was required before signing the contracts.
“These anomalies that we are addressing now should have been cleared before any contract was signed. Once the policy is implemented, it could lead to the contracts undergoing minor adjustments,” Majiwa said.
He further said the contracts must be aligned with the county policy or risk being declared null and void.
However, Lands and Housing executive Charles Kerich said no other contracts have been signed because negotiations are ongoing.
Last year, Kerich said the joint venture unit sharing ratio would be 70:30 in favour of the developer.
However, the Lands committee discovered that Erdemann, the company awarded Ngong Road estates phases 1 and 2 had a ratio of 84:16.
Defending the contract Zebin Yang, a director of Erdemann, said City Hall had re-negotiated the ratio from the previous 82:18.
This was due to changes made from the original plan of 4,068 houses to 5,085.
Yang said the proportion was as a result of their contribution to the project, with Nairobi only providing the land.
“The land totals 25 acres valued at Sh8 billion and the input from us adds up to Sh48 billion for the two phases,” Yang said.
He said the contracts for the two phases were signed in different years.
“Phase 2 was signed in August, 2017 while Phase 1 was signed a year later on August 16, 2018, he said.
Former county attorney Lydia Kwamboka and former county secretary Peter Kariuki signed on behalf of City Hall.
Kiragu said the contracts have a clause giving the developer power to change prices for the houses units without consulting the county government. “As a committee, we will look into those issues we feel that the county is getting a raw deal, he said.
“We have a mandate to protect the county and Nairobi residents.”