NAIROBI, Kenya, Feb 6 – National Social Security Fund (NSSF) Board members who approved the multi-billion shilling infrastructure development tender for Nairobi’s Tassia Estate should be made to pay back Sh5.03 billion if the project is cancelled, according to Central Organisation of Trade Union (COTU) Secretary General Francis Atwoli.
Atwoli told the Public Investments Committee that the approval of the Tassia II Infrastructure Development Project is illegal and fraudulent and called for prosecution of officers who were involved in its approval.
“NSSF cannot be held responsible for a tender which was irregularly awarded. Those individuals that were involved will be responsible for that as individual trustees,” he said.
Atwoli said a precedent had already been set in 2002 when the High Court found former National Social Security Fund Managing Trustee, the late Ben Mutweta responsible for the loss of the fund’s Sh258 million and ordered him to pay back the money.
In a 15-page ruling, judge John Mwera said it was clear from evidence that Mutweta set in motion a process that saw the State Pension Fund lose Sh258,133,333 at the hands of the collapsed Euro Bank.
Mutweta, who died in November in 2012 and had served at the helm of the fund for two months, was found responsible for the loss of the fund’s Sh258 million, which was sourced from the Central Bank to buy stocks.
Labour Secretary Kazungu Kambi last month told the National Assembly Committee on the Labour and Social Services that Kenyan pensioners risk compensating China Jiangxi International for breach of contract.
The COTU boss questioned the hurried manner in which the process took and pointed out that he never received an email message in which board members purportedly approved the project and picked the Chinese contractor.
“All board decisions are made by resolution not through circulation,” Atwoli explained. “A notice must be issued to the board of trustee in time to look at it critically; the viability of the project, is it a priority of the fund and if this project is not viable who will be responsible.”
Atwoli further called on the MPs to amend the NSSF Act – which was only enacted last month- in order to give the Board mandate to oversee and audit the decisions of the Fund’s Managing Trustee.
The committee is probing whether the NSSF Board of Trustees flouted Article 227 of the Constitution, the Public Finance Management Act and provisions of Public Procurement and Disposal Act in awarding the tender to China Jiangxi.
Atwoli sounded the alarm on the matter after he questioned the variation in cost of the Tassia II utility upgrade from the initial Sh3.3 billion to Sh5 billion.
The project involves development of infrastructure services that is required for the Nairobi county government to approve sub-division and issuance of titles to 5,500 plot owners.
The Public Procurement and Disposal Act, prohibits procurement of services without a budget. The law also requires that money must be allocated before any such procurement.
“The right procedure would have been to collect the contributions first before tendering. You were also required to get the landowners’ consent before tendering the project,” Atwoli said, adding that advertising the tender without following the laid-down procedure had exposed the fund to immense losses in the event that the tenants failed to pay the Sh920,000 meant for the development of the infrastructure.
The State-controlled National Social Security Fund advertised for construction works at the plots it sold in 2003, including roads, electrical installations, sewerage and plumbing works.
“Hence there should be no award of a contract until and unless a formal resolution and approval is granted by the board, if at all, in a formally constituted meeting.” she added that FKE has asked acting NSSF Managing Trustee Richard Lang’at to convene an urgent board meeting to discuss the matter.
The tender came four months after Nairobi Governor Evans Kidero directed the Fund to carry out the construction works to improve the living conditions of the estate.
NSSF had sold homeowners in the estate land on which they had allegedly squatted for years.
Former acting NSSF managing trustee Hope Mwashumbe said that the cost of the works had been included in the price the residents paid for their homes.