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Audit raises queries on stalled Sh251m NHC projects

Auditor General Edward Ouko. FILE PHOTO | NMG
Auditor General Edward Ouko. FILE PHOTO | NMG 

Auditor-General Edward Ouko wants the National Housing Corporation (NHC) to release tied-up capital amounting to Sh251 million that has remained in dormant schemes for more than one year.

Mr Ouko says NHC has schemes in progress totalling Sh1.8 billion as at June 2016, out of which Sh251,099,766 are dormant schemes.

“Although the dormant schemes continue to tie up the corporation’s funds, management has not explained what it is planning to do with the schemes to release the tied-up capital,” Mr Ouko says in the latest audit report for the corporation dated June 2, 2017.

Mr Ouko singles out two schemes, Kanyakwar II in Kisumu and Makande Estate in Mombasa as some of the projects that have stalled.

He says Kanyakwar II, which was put up at a cost of Sh207,330,707 had stalled due to some disputes with the contractor.

“Although this project had stalled since the beginning of the financial period, it has continued to attract costs amounting to Sh13,854,373. It was noted that out of these charges, Sh12,579,377 relates to interest on construction costs and Sh436,350 relates to supervisory costs,” Mr Ouko says.

In addition, the NHC did not explain to the audit team how a turnkey project, fully funded by the contractor, could attract interest on construction of Sh12.6 million.

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