NSSF members could lose Sh11.5bn in Hazina Tower project

For 20 years, the National Social Security Fund has been on a mission to rule the Nairobi skyline.

Not from the vantage view of a hill that its headquarters stands but in terms of an actual engineering feat that the controversial Hazina Trade Centre promised.

With a design inspired by the image of a Maasai moran standing with his legs crossed and leaning on a spear, the construction of the 39-storey tower started in 1997.

Standing at 180 metres upon completion, the building would be the tallest in Kenya and third in Africa after the Carlton Centre in South Africa and Cairo Tower in Egypt.

COMPENSATION
But the project is yet to take shape after the NSSF run out of resources to match its ambitions before current legal challenges arose.

Now about 2.5 million members who contribute to the fund could be left Sh11.5 billion short with only a stump of the skyscraper to show for it in what has the makings of an unravelling scandal.  

The contractors and consultants have already been paid Sh2.73 billion and there is a claim of Sh1.9 billion yet to be settled.

The contractors are also seeking a contentious compensation of Sh6.9 billion over project delays.

In addition, the remaining segment of the building is estimated to cost Sh4 billion, assuming there are no further hitches.

LAWSUIT
The building was designed by a local consultant, Mruttu and Salman Associates, and is being developed by a Chinese firm, Jiang Xi International, a locally incorporated international construction firm.

The structure is located between Moktah Daddah and Monrovia streets in Nairobi’s central business district.

MPs have now ordered that only minimal work should continue at the construction site in a bid to save taxpayers loss of billions of shillings as controversy continues to dog the building that could have been one of the iconic structures in the city.

The stoppage of major works was necessitated by a visit of members of the Public Investments Committee to the site on Wednesday where they found that the Chinese contractor is now demanding Sh6.9 billion compensation for the stalled construction.

Taxpayers are losing a whopping Sh20 million per week following stoppage of works after a suit was filed by troubled supermarket chain, Nakumatt.

LOSSES
The project stalled after Nakumatt, then an anchor tenant, moved to court to block NSSF from constructing an extra 36 floors for loss of business.

Data that was handed to chief quantity surveyor at State Department of Public Works, Alphonce Okweto, on Wednesday shows that the Sh20 million loss per week is composed of Sh1.7 million for extended preliminaries, Sh8.7 million on loss and expense due to head office overheads and Sh9.8 million on idle plant and equipment.

MPs learnt of the additional cost during the site visit.

Mr Okweto told the MPs they are currently reviewing the contract claims and will present their independent report in two weeks.

The lawmakers were shocked by the outrageous figure, which the taxpayers will be forced to pay despite no work being done.

REVIEW
The Sh6.9 billion is above the Sh6.8 billion, the entire cost of the project, and it has never been brought to the attention of the MPs and even the officials at Public Works department.

The data, prepared by Tana and Associates – the quantity surveyors and project managers – shows that the total claim based on extension of project time from the 94 weeks recommended by the architect stands at more than Sh1.8 billion.

The project consultants – Mruttu Salman and Associates, Tana and Associates, Abdul Mullick and Associates and Kisa and Partners/Metroeng – have been paid a total of Sh627.9 million.

Mr Okweto, who attended the meeting on Wednesday, told the MPs that the Sh6.9 billion was only brought to their attention on Tuesday, just a day to the meeting.

“This issue of the Sh6.9 billion was only brought to our attention on Tuesday.

"We will sit down and review it to see if indeed it is the correct amount of money that should be paid to the contractor as compensation claim,” Mr Okweto told MPs.

LEGAL FEES
More shocking is that the government officials from the Ministry of Public Works said there was no need for the court case between NSSF and Nakumatt further depicting of how NSSF wasted taxpayers money to pay legal fees for the lawyers that represented it.

It was not immediately established how much NSSF spent on legal fees.

MPs have therefore directed the management to furnish them with all the documents of the legal firm that represented them in court and the amount they were paid.

“When we came on board in May 2017, the project couldn’t move because the consultants had misadvised NSSF to go 36 floors up without parking space,” Mr Okweto said.

“When the court lifted the injunction, we did material test and found that they wanted to do 66 columns. We said the 29 they had not done were unnecessary,” he added.