In Summary
  • Yet, since it opened its doors in March, little activity has been going on at the mall owned by Lake Basin Development Authority.
  • The other outstanding issue between the contractor and the government concerns the issue of LBDA taking up the Sh2.5 billion bank loan that Erdemann took to construct the mall.

With nearly 60,000 square metres of space and its excellent location at the Mamboleo junction on the Kisumu-Kakamega road, expectation was high that the expansive the Lake Basin Mall in Kisumu would help improve the economy of the lakeside city.

Yet, since it opened its doors in March, little activity has been going on at the mall owned by Lake Basin Development Authority (LBDA) and occupancy remains low and has become the subject of claims, counter claims and an investigation by the Ethics and Anti-Corruption Commission (EACC), which is now in its sixth year. A certificate of practical completion had been issued earlier on April 19, 2016.

Despite a number of government ministries and agencies explicitly giving the mall a clean bill of health, the combination of the ongoing investigations and the dispute between the contractor, Erdemann Property Ltd, and the government over Sh645 million the former is demanding as financial has meant that prospective tenants have kept off due to the uncertainty that prevails.

COMMERCIAL LOAN

The other outstanding issue between the contractor and the government concerns the issue of LBDA taking up the Sh2.5 billion bank loan that Erdemann took to construct the mall. In the agreement, Erdemann was financing 80 per cent while LBDA was financing the remaining 20 per cent. But, upon handing over the mall, LBDA was to take over the commercial loan.

“The combination of an endless investigation by EACC and lack of authorisation to pay the contractor costs that have been ascertained has resulted in constant negative publicity which is the reason the mall is not yet full,” said Cavince Owidi, the LBDA board chairman.

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