State seeks investor in Sh5.9 billion Utalii hotel

The State is seeking a private investor to put up a Sh5.9 billion state-of-the-art hotel as part of the flagship Ronald Ngala Utalii College.

The Tourism Fund says it is eyeing a public-private partnership to set up the “Crab Hotel” that will serve as a training centre for the Kilifi-based training college.

The college will stand on a 59-acre piece of land while the hotel will take 20 acres along the Indian Ocean in Vipingo, Kilifi County.

“The fund already hired consultants for the hotel component; however commissioning is yet to be done.

“Tourism Fund is committed to obtaining a solid public-private partnership before commissioning to avoid interests and penalties,” said Alphonse Kioko, Tourism Fund board of Trustees chairman.

He told the National Assembly’s Committee on Implementation that the fund has entered into an accelerated completion of the Sh4.9 billion college.

“Based on the cash flow presented by the consortium on sectional completion, the funds required to complete Phase I of I of the project is currently at Sh1,625,225,000,” David Mwangi, acting chief executive, said.

He told the Committee on Implementation chaired by Moitalel ole Kenta that the funds required to complete actual physical work on Phase II of I of the Project is Sh1,135,753,151.

The Tourism Fund, the Tourism Promotion Fund, and the Treasury have jointly pledged more than 1.5 billion to complete the college by July 2022.

“The delay in completion of the project is attributed to a lack of funding from the National Treasury and the Covid-19 pandemic that hit our revenues,” said Mr Mwangi.

The college component, which is currently 60.01 percent, is expected to be commissioned by President Uhuru Kenyatta in July 2022 with the first intake of 250 students due in September the same year.

Mr Mwangi said the fund is keen on avoiding a recurrence of accrued interests and penalties due to non-payment till the entire project is completed.

“The commencement of phase II will only be realised once a suitable Public-Private Partnership is identified, hence there will be no risk to the Fund, as regards loss of monies before then,” he said.

Mr Ole Kenta told the Fund to ensure value for money even as it investigates delays in the completion of the project that was tendered in 2013.

“We intend to implement the resolution of the House. Please ensure timely completion of the project to safeguard the public interest,” Mr Kenta said.

The TF told the National Assembly’s Public Investments Committee (PIC) chaired by Abdulswamad Nassir that earnings from levies imposed on the hospitality industry slumped by Sh1.6 billion due to economic fallout from Covid-19 pandemic.

Mr Mwangi said TF earnings from the two percent levy on accommodation, food, and drinks dropped from a high of Sh2.7 billion to Sh1.1 billion, a 40.7 percent drop.

“Before Covid-19 struck, we were making between Sh2.5 billion to Sh2.7 billion but it went down to Sh1.1 billion currently,” Mr Mwangi, said.

Mr Mwangi disclosed this following a question by PIC chairman Abdulswamad Nassir who wanted to know the current Tourism Fund annual turnover.