Kazongo quizzed over Sh6.5bn contract awarded to Chinese firm

Former National Social Security Fund (NSSF) managing trustee Alex Kazongo was taken to task to explain how a Chinese company was awarded a Sh6.5 billion contract to construct additional floors at Hazina Trade Centre.

Parliament’s Public Investments Committee (PIC) on Thursday accused Mr Kazongo of procuring consultants for the project without following provisions of the Public Procurement and Asset Disposal Act, 2005.

Mr Kazongo claimed he was implementing the decisions of the NSSF management and the board of trustees, but could not produce documents showing that the project was authorized for re-development.

“I was implementing the directive of the management and the board of Trustees who approved the project. I, however, do not have documents with me now to confirm that indeed the management and the board of trustee approved this project,” Kazongo said.

The committee, which is investigating the controversial award of the project to China Jiangxi International, threatened to recommend that Mr Kazongo be held accountable and be surcharged on the likely loss on the project, whose initial cost was put at Sh5.9 billion.

NSSF, through Mr Kazongo, reactivated the construction of Hazina Trade Centre, which currently houses supermarket chain Nakumatt.

Nakumatt has since moved to court seeking Sh2.5 billion compensation from NSSF over the implementation of the project, which is expected to see the construction of 34 additional floors on the building.

PIC chairman Adan Keynan accused Mr Kazongo of flouting procurement laws that require open tendering for projects whose cost exceeds Sh6 million.

Mr Kazongo in 2011 wrote directly to Abdulmalik Associates and Turner Associates appointing them as structural/civil engineers and quantity surveyors after 12 years of staling of the project. The firms had handled the initial project.

“Hazina Trade Centre construction was on the books for 12 years and you decided to restart it in 2010. You wrote to the two firms asking them to confirm that they can undertake the project yet there was no new feasibility (study) or tendering,” Mr Keynan said.

Mr Kazongo informed the firms of their reappointment for the project, which is meant to complete the office tower with some amendments as originally designed.

“In your letters, did you follow provisions of Public Procurement and Disposal Act that obligates all State officials while tendering? The Public Procurement Oversight Authority (PPOA) in its submissions to this committee said every aspect of the project was an illegality and that all those involved, including one Alex Kazongo, should be surcharged,” the Eldas MP said.

Mr Kazongo said the architects and the quantity surveyors had been prequalified and were picked having undertook the first phase.

“The PPOA were consulted on these matters. However, I need more time to find out whether a letter was written to them and its approval. We also consulted Nakumatt, City Council of Nairobi and Nema (the National Environmental Management Agency),” he said.

The former trustee denied instructing the consultants to undertake the project before a feasibility study was done.

“I will seek evidence to support my action… I was implementing board decisions,” he reiterated, adding that he left NSSF before the project was awarded to the Chinese firm in question.

Mr Kazongo, who also answered questions regarding a joint venture for the development of 20,000 housing units in NSSF’s 1,100-acre land parcel in Mavoko and the proposed construction of a multi-purpose business park on the funds’ Kenyatta Avenue plot said the projects were meant “to optimize returns on pensioners’ contributions”.

On the Mavoko project, Mr Kazongo said the joint venture would have seen NSSF invest the land, valued at Sh3 billion (10 per cent of the total project cost), while the joint venture investor would pump in 90 per cent of the total project cost.

“We were going to give 10 per cent or Sh3 billion while the investor provides 90 per cent. We were to develop 20,000 housing units each at a cost of Sh1.5 million translating to a total project cost of Sh30 billion,” Kazongo said.

On the NSSF Kenyatta Avenue plot, Mr Kazongo said he left NSSF when it was at the concept stage.

He said the development of the three projects would have seen View Park Towers and Hazina Towers disposed to meet the Retirement Benefits Authority requirement that no more than 30 per cent of the fund should be invested in real estate.