Judiciary losing millions in rented unused offices

The Auditor-General has asked the Judiciary to seek refunds and re-negotiate lease contracts for its partial occupancy of Rahimtullah Towers in Nairobi, underlining the questionable real estate deals closed by the department.

Auditor-General Edward Ouko says in a special report that about 70 per cent of the building, which is the tallest in the Upper Hill neighbourhood of Nairobi at 22 floors, is occupied.

The audit office says that 130 Judiciary staff occupied the six floors of the building in February, against the set 420 workers, for office space that was leased in July and comes with an annual rent of Sh39.4 million.

The Judiciary also paid a six-month deposit based on rent effective July 2017, translating to an over payment of Sh1.08 million per month.

Besides Rahimtullah Towers, Chief Justice Willy Mutunga is yet to occupy a palatial residence in Runda estate bought last year at Sh310 million.

While Elgon Place, leased for the Court of Appeal in a six-year deal worth Sh420.6 million, remains unoccupied.

“Judiciary should demand back the entire amount of Sh32.4 million paid as security deposit since rent is payable quarterly,” Mr Ouko noted in the report in reference to the Rahimtullah deal.

“Leasing of over 43,000 square feet at Rahimtullah which is currently partially occupied was not necessary. The Judiciary should make a decision on whether to negotiate the current lease terms.”

The auditor-general said that former Chief Registrar Gladys Boss Shollei should be held responsible for the real estate deals which are costing the Judiciary millions of shillings.

READ: Sacked Shollei among Judiciary bank signatories

The Judicial Service Commission sacked Mrs Shollei in October, citing misappropriation of funds, insubordination and incompetence. But she moved to court to quash her dismissal.

The auditor has also questioned discrepancies between the Rahimtullah lease awarded by the Judiciary Tender Committee and that signed by the owners of the office block.

The tender committee awarded a lease of 41,897 square feet at an annual charge of Sh76 million while a signed pact indicates rent of Sh39.4 million for 35,224 square feet, according to the audit report. The offices in Rahimtullah building were previously occupied by consultancy firm PricewaterhouseCoopers (PwC).

Competitive tendering

The consultancy firm sold the Judiciary second-hand furniture, fittings and IT network equipment for Sh59.6 million through direct procurement in breach of procurement laws which require competitive tendering.

“On physical inspection on February 7… the networking equipment had not been operationalised yet the amount of money involved is colossal,” Mr Ouko noted in the report.

The audit report, which is likely to be tabled in the House when it resumes its sittings in June, was commissioned when the fighting between Mrs Shollei and her former employer went public.

The report, prepared for the Parliamentary Accounts Committee, accuses the chief justice and Mrs Shollei of presiding over suspect deals at the Judiciary worth at least Sh645 million.

The Court of Appeal judges refused to move to Elgon Place citing health concerns over the telecommunication masts adjacent to the building.

The Judiciary bought the CJ a house from Machakos Senator Johnstone Muthama and paid for it in April last year, but a scandal over procurement procedures got in the way before Dr Mutunga could occupy it.