NAIROBI, Kenya Jan 23 – Kenyan pensioners risk losing Sh5.03 billion if a contract awarded to a Chinese firm for infrastructural development within the Tassia scheme in Nairobi is cancelled.
Labour Secretary Kazungu Kambi made this revelation on Thursday when he appeared before National Assembly Committee on the Labour and Social Services which is probing the controversial National Social Security Fund’s (NSSF) Tassia II Project.
Kambi told the committee that he decided to temporarily suspend the project in order to give the NSSF another chance to re-visit some of the allegations raised by Central Organisation of Trade Unions (COTU) Secretary General Francis Atwoli.
“I have determined that there is a valid contract before us which now makes this more difficult,” he stated.
“Mr Chairman, in case the contract is cancelled NSSF will have to pay the full contract which is Sh5.03billion.”
COTU which represents workers’ interests had in September called for the project to be stopped until the investment committee had discussed the matter.
However, the Cabinet Secretary’s decision to suspend the commencement of the project was put to question by MPs sitting in the committee who demanded to know which law directly empowers him to take such action.
Kambi admitted that he only moved to temporary halt the project, because he was concerned that Kenyans and indeed the government might lose billions of shillings if it turns out the project was dubiously done.
“Legally I don’t have any grounds to suspend it, but I did it because I looked at Section 70 of the new NSSF Act which says the government takes the greatest responsibility if at all money is going to be lost then people are going to blame the government,” he told the House team.
Kambi further told the MPs that he was never briefed of the project when he took over office in May 2013. He said he only learnt about it through an advertisement which was published in the newspapers.
“I saw that advertisement in July and I called the then Managing Trustee, who then briefed that this is a long time project which started in 1992 until now. She also told me that she authorized for it to be advertised and tendered,” stated the Labour Secretary.
Kambi dismissed critics and claimed that all the formalities had been endorsed by the board members except Atwoli.
Federation of Kenya Employers (FKE) Executive Director Jacqueline Mugo and Atwoli have questioned the manner in which Sh5 billion was approved for the Tassia project through email.
The two key stakeholders on the NSSF Board of Trustees accuse NSSF Managing Trustee Richard Langat and Kambi of misleading the public on how the decision was reached to spend the massive sum on infrastructural development within the Tassia scheme in Nairobi.
Mugo questioned the hurried manner in which the project was purportedly approved and a contractor picked.
Despite Atwoli’s and Mugo’s objections, five members of the NSSF Board approved the Tassia II Settlement Scheme project through e-mail and not at a full board meeting as required by law.
But the Labour Secretary maintained the request for approval was sought through an e-mail circulated on December 18 and the project was approved the following day.