Onyango Oloo under fire over Ksh 4.2B ‘illegal’ Kisumu mall
Former The national Alliance (TNA) Secretary General, Onyango Oloo, executed a contract for the construction of the Lake Basin Development Authority (LBDA) mall in Kisumu whose debt currently stands at Ksh 4.2 billion.
National Assembly’s Public Investments Committee (PIC) heard that a non-executive chairman personally signed the revised contract that escalated the cost of the project by Ksh 1.41 billion contrary to the provisions of the State Corporations Act which only allows the Chief Executive Officers and executive chairmen of state corporations to execute contracts.
Oloo appended his signature to a deed of variation of form agreement on February 17, 2015 alongside LBDA Chief Engineer, Kabok Aguko, varying the bid price to Ksh 3.86 billion.
The original agreement of the contract provides that the bid price amounted to Ksh 2.45 billion.
“Why was a non-executive chairman allowed to execute a contract for the construction of the mall? This is another super chairman who is politically correct like Mr Bruce Odhiambo, the former Youth Enterprise Development Fund, who wielded immense power which they didn’t have legally,” Adan Keynan, the PIC chairman said.
Kisumu Town West Member of Parliament, Olago Aluoch, said the fact that the contract was signed by a non-executive chairman makes it illegal.
“Mr Oloo had no legal authority to sign a contract. This is illegal going by the Law of Contract. But we appeal to the Treasury to release Ksh 1.5 billion to save the mall from being auctioned and ruthlessly deal with architects behind the illegal use of the title deed to advance money to a contractor,” said Mr Aluoch.
The committee also questioned the use of LBDA title deed by the contractor, Erdemann Property Ltd, owned by a Chinese national, to secure a Ksh 2.5 billion from Cooperative Bank to put up the shopping mall.
According to Mr Oloo’s revised contract, LBDA was tied to pay Cooperative Bank Ksh 2.5 billion that was borrowed by Erdemann to put up the mall.
“The employer (LBDA) shall pay the amount of financing obtained to Cooperative Bank of Kenya towards repayment of the loan advanced to finance the project and the employer shall be responsible for repayment of the balance owed to Cooperative Bank of Kenya from the rental income collected by the employer in respect of the development,” clause 3(d) of the contract read.
LBDA Acting Chief Executive Officer, Evans Atera, said the loan, which was supposed to be repaid in two bullet installments of Ksh 1.5 billion on November 15, 2015 and Ksh 1.5 billion on November 15, 2016 has not been repaid and is attracting a Ksh 43 million monthly interest.
“We plead with you not to stop the Treasury from releasing Ksh 1.5 billion allocated to us in the supplementary budget and the coming budget to help us reduce the accruing interest,” Mr Atera told PIC.