A Chinese contractor has slapped National Social Security Fund (NSSF) with a Sh2.1 billion claim after the cancellation of a contract for construction of housing units in Embakasi, Nairobi.
Acting NSSF managing trustee Antony Omerikwa told Parliament that China Jiangxi is seeking Sh2.1 billion as compensation for the stalled Phase 6 of Nyayo Estate Embakasi.
The building of the 355 housing units for Sh2.1 billion stalled in 2016 after the fund failed to get approval City Hall to change the use of land set for construction from public utilities to commercial, prompting the NSSF to cancel the deal in May 2016.
China Jiangxi had been paid Sh227 million for 52 units the Chinese firm built before cancellation of the contract inked in 2013.
The NSSF sold the 52 units for Sh360 million.
China Jiangxi recently demanded Sh6.8 billion from the NSSF for the stalled construction of a 39-storey building, which had eight floors including the four that housed Nakumatt Lifestyle, in Nairobi’s city centre.
Ministry of Public Works reviewed the claim and cut it to Sh870 million. The NSSF reckons the 52 units built in Nyayo Estate were not worth Sh227 million and is demanding a refund on the overpayment.
“The Chinese are asking for a significantly higher figure around the value of contract of Sh2.1 billion for works not done.
“They are demanding about Sh2.1 billion from 2015 to 2017 when the project was terminated,” said the NSSF during the examination of its audited books of accounts for the year to June 2015.
The fund has asked the Ministry of Public Works to review the contractor’s claim and decide on an agreeable compensation.
Public Investments committee chairperson Abdulswamad Nassir demanded that the NSSF provides proper details on how its board entered into a contract with the Chinese firm without securing the necessary approvals from City Hall.
Change of user
“You jumped the gun, you engaged a contractor without securing change of user. We want proper and detailed submissions on this project,” said Mr Nassir who is also the Mvita MP.
The fund told MPs it sought a legal opinion from the Attorney General (AG) after the board decided to exit the project.
“As we exited the project, we sought counsel from the AG office on where we can apportion blame to either the consultant or contractor.
"The AG is yet to give a final position from May 2017 when the board decided to terminate the project,” said the NSSF.