PIC wants Oloo, ex-PS Orege barred from public office over mall

March 2, 2017 6:13 pm
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Committee Chairman Adan Keynan urged the Central Government to put in place a mechanism that will secure the public facility from falling into the hands of private individuals/PARLIAMENT

, NAIROBI, Kenya, Mar 2 – Parliament’s Public Investments Committee (PIC) on Thursday requested President Uhuru Kenyatta to intervene and save the Sh4 billion Lake Basin Development Authority (LBDA) mall in Kisumu from being auctioned by Co-operative Bank.

Committee Chairman Adan Keynan urged the Central Government to put in place a mechanism that will secure the public facility from falling into the hands of private individuals.

Keynan further added that the government should pursue and prosecute all the architects of an intricate scheme that saw the title deed of the facility being used to secure a private loan at the bank.

The mall was built through a partnership between LBDA and a developer on a 20:80 basis respectively. The amount owed to the developer was to be paid upon completion of the mall.

A brief presented to the committee shows that the LBDA took a loan of Sh2.5 billion from Co-operative Bank, which was charged to the title deed of the authority’s land which houses its headquarters and the mall.

It emerged that neither Treasury nor the Ministry of Devolution and Planning had signed off on the loan, despite it being expressly provided for in the Public Procurement Act.

The committee has further called for the prosecution of former TNA Secretary-General Onyango Oloo who was the chairman of the Board and former Regional Development PS Carey Orege who was in charge at the body when the loan was signed.

The political careers of the two officials – who have announced interest in running for the Kisumu Town parliamentary seat and Homa Bay gubernatorial positions respectively – might be still-born, after the committee said they will recommended that they be barred from holding any public positions.

This is after it emerged that Oloo had appended his signature on the contract for the project, which the committee said it is against the procurement law and the Law of Contract Act.

The MPs team which is tasked with probing whether citizens are getting value for their taxes put into any investment says it will further recommend the blacklisting of all the contractors involved in the plot.

MPs Olago Aluoch (Kisumu Town West), Wafula Wamunyinyi (Kanduyi) and Paul Otuoma (Funyula) said the mall attracts Sh145 million daily interests after the Devolution and Planning Ministry failed to release money owed to the bank.

The mall built with borrowed funds is accumulating Sh1.8 million in interest per day and the MPs warned that the government could be forced to pay double if handing over is not done.

Otuoma unsuccessfully attempted to convince the parliamentary committee to freeze the disbursement of Sh1.6 billion it had set aside in the current budget to help the Authority offset part of Sh2.5 billion borrowed to put up the mega shopping mall.

In a bid to get bearing on the saga, Keynan directed the Office of the Auditor General to conduct a forensic audit on the LBDA starting from its inception to date. He said the Auditor should focus on the asset register, liabilities and pending bills.

He further directed Co-operative Bank and the National Treasury to provide a chronology of their involvement in the saga. He said the report should be submitted to the committee within seven days.

The committee also ordered the Kenya Revenue Authority to provide tax compliance records of developer while the Office of the Registrar of Companies has been directed to submit the names and particulars of the directors and shareholding of the firm.

The committee has also ordered for the original contract to the controversial project after it emerged there had been various revisions.

LBDA Acting CEO Evans Areta was also ordered to produce the full Board minutes that approved the project as well as a copy of the Tender Committee and Risk and Compliance Committee.

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