The Ministry of East African Community (EAC) and Regional Development has blamed the Treasury for woes facing the Lake Basin Mall for failing to service a Sh2 billion loan.
The 360,000 square feet mall has attracted just a few tenants despite being completed in 2016 as claims, counter-claims and a probe by the Ethics and Anti-Corruption Commission take centre stage.
EAC Secretary Adan Mohamed told Parliament that the Treasury had withheld vital approvals concerning the loan and had not released funds to the Lake Basin Development Authority (LBDA) for two consecutive years.
The LBDA, the co-developer of the mall, signed concessionary loan agreements with Treasury in 2016/2017 for Sh1.5 billion and 2017/2018 for Sh500 million.
The EAC requested Treasury for approval for LBDA to negotiate with Co-operative Bank with view of taking over the loan.
“However, the National Treasury has not given approval to date and in the meantime the loan continues to accrue interest,” Mr Mohamed told the Senate Devolution and Intergovernmental Relations Committee yesterday. He said Treasury has not released budgetary allocation to LBDA for the previous and current financial years, putting it in a tight spot.