Parliament has put the National Social Security Fund (NSSF) on the spot over a Sh243 million claim by a Chinese contractor who was building the incomplete Hazina Trade Centre in Nairobi.
The Public Investments Committee (PIC) said China Jiangxi International had slapped the NSSF with the compensation claim for delayed payments to the firm for the stalled construction of the city centre office block.
China Jiangxito was awarded the contract to upgrade the building to 36 floors from the initial eight, but work stopped on the 15th floor.
The contract prescribes that delay in settlement of contractors’ claims will earn interest at the rate of three per cent above the average Central Bank of Kenya (CBK) rate — which is currently at seven percent.
“On July 10, 2019, the contractor claimed Sh243 million interest on delayed payments. This figure continues to increase as the claim remained unpaid as at June 26, 2020,” Abdulswamad Nassir, who chairs PIC, said in a report on audited financial statements of 48 State corporations tabled in Parliament last week.
The contractor wrote to the NSSF seeking the Sh243 million in interest payments for 553 days that the bill has remained unpaid. China Jiangxi has so far been paid Sh2.1 billion.
“This is in breach of clause 23.3 of the contractor that obligates the NSSF to pay claims assessed by the project manager within 30 days of issuance of payment certificate,” Mr Nassir said.
The committee wants the NSSF board held responsible for any interest claims arising from late settlement.
“The committee recommends that considering that the Attorney-General and the department of public works had advised NSSF to settle the assessed claims due to the contractor and the NSSF board failed to adhere to such advice, the NSSF board should be held responsible for any interest claims from the contract arising from late settlement by dint of clause,” PIC said.
Mr Nassir’s team directed the NSSF to only pay for claims certified by the project manager, the department of public works.