City Hall must be cautious about transfer of assets

• Embakasi MP Ferdinand Waititu claimed that the City Hall, through its Finance and Planning Committee, had passed a resolution to transfer the estates to the Local Authorities Pension Trust (LAPTRUST) in lieu of Sh8 billion in unremitted retirement deductions from workers.
• The properties lined up for sale, according to the MP; include Jivanjee/Bachelors Quarters, Old Ngara, New Ngara, Kariakor, Jamhuri and Buru Buru as well as Sunken Car Park along Taifa Road.
• These, according to Mr Waititu, could fetch a market value of up to Sh60 billion, which is way higher than the total debt of Sh13 billion that the council is looking to settle.

The emerging revelations that the City Council of Nairobi is planning to sell some of its assets to settle debts is yet another reminder of the management shortcomings at the institution.

Embakasi MP Ferdinand Waititu on Monday claimed that the City Hall, through its Finance and Planning Committee, had passed a resolution to transfer the estates to the Local Authorities Pension Trust (LAPTRUST) in lieu of Sh8 billion in unremitted retirement deductions from workers.

Mr Waititu further claimed that the resolution also covered a provision to pay off a Sh5 billion loan that City Hall borrowed from Equity Bank last year.

Local Government PS Karega Mutahi confirmed on Tuesday that a resolution had been passed to allow transfer of some assets of the council to LAPTRUST.

Mr Mutahi, however, appeared to discount one of Mr Waititu’s claims when he said that no assets would be transferred to private buyers.

In an ideal situation, the real questions here should be on why City Hall has fallen behind pension remittances, which should ordinarily be a priority item for an organization that has responsible management.

The other question should be why the Council has given up on its unquestionably big potential to generate revenue, and has instead settled on a desperate measure of stripping assets to meet a recurrent expense.

Yet one particular issue that Mr Waititu raised should be taken seriously, and that is the valuation of assets that are earmarked for transfer in relation to the debts that they are intended to settle.

The properties lined up for sale, according to the MP; include Jivanjee/Bachelors Quarters, Old Ngara, New Ngara, Kariakor, Jamhuri and Buru Buru as well as Sunken Car Park along Taifa Road.

These, according to Mr Waititu, could fetch a market value of up to Sh60 billion, which is way higher than the total debt of Sh13 billion that the council is looking to settle.

The MP’s valuations could be exaggerated or for that matter understated, but he raises a point that cannot be ignored in the interest of transparency and safeguarding of these public assets.

If the council eventually settles on the option of using its assets to pay its pensions debt, then it must get a fair deal out of the transaction.

Valuations of the assets involved must be done in an above board process, as is the verification of the debts themselves.

Even more importantly, the Council must also have in mind the interests of the occupants of some of the estates earmarked for sale.

Any transfer of assets that is likely to result in displacement or financial loss to occupants of the houses could as well be challenged in court, resulting in prolonged delays of the process.