The Fund hopes to settle the development costs from about 5,500 plot owners who are supposed to pay Sh920,000 per plot to finance the project, raking in Sh5.06 billion.
The Sh5.06 billion will then go towards offsetting the bills that come from China Jiangxi International Limited, which won the tender to carry out the infrastructure development works in the area.
The Chinese firm won the tender at a cost of Sh4.629 billion and not the 5.053 billion Shillings that has been claimed and was the closest bidder to the budget that the NSSF had set out.
An initial budget prepared by NSSF in 2011 was Sh3.3 billion and it included the costs of the services that would be rendered on the land but in 2012 the cost went up by Sh1.2 billion after the Nairobi City Council directed NSSF to ensure that the area had culverts, access roads and headwalls.
“This raised the budget to Sh4.5 billion but none of the bidders had such a budget. And the reason why the City Council directed us to bring up these facilities was because it did not want the area to turn out into a slum,” said a well placed source within the Fund on Wednesday.
Labour Cabinet Secretary Kazungu Kambi had on Monday assured journalists that NSSF would not lose any money in the process.
The money that will be raised from the plot owners will not only settle the tender costs but also leave more than Sh415 million which will take care of professional services and enable the Fund to make some profit.
“The infrastructure development cost will entirely be recovered from the beneficial owners of the plots,” Kambi had said, noting that the Fund bought 1,760 acres of the land between 1994 and 1995 for Sh2.2 billion.
Survey works on the land are however incomplete making it difficult to know with certainty how many individuals live on the parcel.
The NSSF official also told Capital FM News that once the survey was completed the price per plot could go higher but that the risk of defaulters was also very high.
The source said that there were many slum dwellers on the land and it might not be possible for them to raise the money required.
Although the current market rate for a 50 by 100 plot of land in the area could go to Sh4 million, the official was quick to point out that NSSF was not a profit making venture and had already been directed by the Courts to sell the land to the squatters at the initial land price of Sh550,000.
“You know NSSF is not a profit making company and the most important bit is to recover the original Sh2.4 billion and other administrative costs that may have been used initially,” explained the source.
Central Organisation of Trade Unions Secretary General Francis Atwoli has been claiming that there is a shoddy deal behind the tendering process and that Kenyans risk losing billions of Shillings in the process.
During the approval phase, all the five Trustees approved the project but Atwoli neither approved nor rejected it.