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Nyayo Estate Chinese contractor and National Social Security Fund (NSSF) tussle over $21m building contract

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In 2014, it emerged that thousands of homeowners in Nyayo estate Embakasi may have paid more than the original price of their houses.

play National Social Security Fund (NSSF) (Capital FM Kenya)

 

  • Acting NSSF managing trustee Anthony Omerikwa told Parliament that China Jiangxi is seeking Sh2.1 billion as compensation for the stalled Phase 6 of Nyayo Estate Embakasi, Nairobi.
  • The project stalled in 2016 after the NSSF failed to get approval from City Hall to change the use of land set for construction from public utilities to commercial.
  • The firm was however paid Sh227 million for 52 units it had managed to build before cancellation in 2016.

The Kenya National Social Security Fund (NSSF) has been slapped with a Sh2.1 billion compensation claim by a Chinese contractor after it cancelled a building construction it had awarded the Chinese firm.

Acting NSSF managing trustee Anthony Omerikwa told Parliament that China Jiangxi is seeking Sh2.1 billion as compensation for the stalled Phase 6 of Nyayo Estate Embakasi, Nairobi.

play Nyayo Estate Embakasi (Facebook)

 

Jiangxi won the building contract in 2013 and as per the contract was meant to build 355 housing units for Sh2.1 billion ($21m).

The firm was however paid Sh227 million for 52 units it had managed to build before cancellation in 2016.

The project stalled in 2016 after the NSSF failed to get approval from City Hall to change the use of land set for construction from public utilities to commercial, prompting the fund to cancel the deal in May 2016.

NSSF later sold off the completed 52 units for Sh360 million ($3.6m).

play Nyayo Estate (YouTube)

 

However despite the profit the fund made, NSSF reckons the 52 units built in Nyayo Estate were not worth Sh227 million and is demanding a refund on the overpayment.

“The Chinese are asking for a significantly higher figure around the value of contract of Sh2.1 billion for works not done.

They are demanding about Sh2.1 billion from 2015 to 2017 when the project was terminated,” said the NSSF during the examination of its audited books of accounts for the year to June 2015.

play Nyayo Estate Embakasi (Facebook)

 

In 2014, through a report presented to Parliament’s Public Investments Committee (PIC) by NSSF Managing Trustee Richard Langat it emerged that thousands of homeowners in Nyayo estate Embakasi may have paid more than the original price of their houses.

The report showed that more than Sh500 million was added to the original bid to carter for cost of plumbing and electrical works.

The fund asked the Ministry of Public Works to review the contractor’s claim and decide on an agreeable compensation.

play Public Investments committee chairperson Abdulswamad Nassir. (the star)

 

Public Investments committee chairperson Abdulswamad Nassir, however, faulted the fund and demanded they provide proper details on how its board entered into a contract with the Chinese firm without securing the necessary approvals from City Hall.

“You jumped the gun, you engaged a contractor without securing change of user. We want proper and detailed submissions on this project,” said Mr Nassir who is also the Mvita MP.

In its defense, the fund told the committee it had sought a legal opinion from the Attorney General (AG) after the board decided to exit the project.

The Ministry of Public Works reviewed the claim and cut it to Sh870 million ($8.7m).