The National Social Security Fund (NSSF) will Friday morning commission the construction of the tallest office tower in Nairobi, marking an end to a tender dispute that had stalled ground breaking for the building for more than two years.
The statutory workers’ retirement fund invited new bids for the 39-storey Hazina Trade Centre early this year following cancellation of the previous tender by the courts.
The fund had in 2011 awarded the construction contract to Cementer Limited, but companies that lost the bid — China Jiangxi International Kenya and China Wu Yi — challenged the tendering process in court.
The tower is to be built on top of the structure currently housing Nakumatt Lifestyle in Nairobi’s central business district.
“The proposed extension works will involve the construction of a 31-storey office tower block to complement the current eight floors (4 basement levels, Ground Floor, 2 Mezzanine &1 Podium),” said NSSF Thursday in a statement.
It is estimated the building will cost Sh6 billion going by Cementers Limited’s quote in their cancelled bid. The bid was the third lowest among the 10 that were submitted then; China Wu Yi was the lowest bidder at Sh5.9 billion.
NSSF had nullified China Jiangxi bid because the company did not submit the current registration certificate for its sub-contractor, Raerex E.A. Ltd, which was to install air conditioning.
The court noted that there was no reason for disqualifying China Jiangxi at the preliminary stage of tender evaluation as it had confirmed the sub-contractor’s registration verbally with the Ministry of Public Works.
The Times Tower, which houses the Kenya Revenue Authority, is currently the tallest building in East Africa at 140 metres high but could lose this position to the Hazina Trade Centre upon completion.
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As at end of last year, NSSF held a portfolio of Sh121.5 billion, with 34 per cent invested in real estate. The fund has been under pressure to reduce its exposure in real estate to meet the regulatory maximum of 30 per cent.
The fund has held that rise of value of its equity holding would see the proportion of real estate holding to its total assets drop to regulatory levels.
NSSF has also announced plans of disposing some of its buildings in a bid to reduce its holding in real estate.
Those earmarked for sale include Hazina Towers valued at Sh1 billion and View Park Towers (Sh1.8 billion), which has already attracted government interest. The State is seeking space to host its enlarged structures such as the Senate.
Pension funds are required to hold some of their investment in liquid assets to help them meet cash demands by retirees.
The fund is currently lobbying for the passage of the NSSF Bill that seeks to increase contributions, capping it at six per cent of an employee’s salary. Two weeks ago the fund took some members of Parliament to Mombasa to lobby them to support the Bill when its presented for debate in the House.