Minister to face tough questions over LBDA mall


Minister to face tough questions over LBDA mall

The Lake Basin Mall located at Mamboleo junction in Kisumu. FILE PHOTO | NMG 

The push to have the Lake Basin Mall in Kisumu handed over to the Lake Basin Development Authority (LBDA) has taken a new turn after senators summoned Cabinet Secretary for East African Community and Regional Development Adan Mohamed to explain the delay.

The CS is expected to appear before the Senate Committee on Devolution and Intergovernmental Relations on July 30 “to apprise the committee” on the circumstances that have made it difficult to pass on the ownership of the mall to LBDA.

Mr Mohamed will also be required to comment on the Auditor General’s report that found the mall was financially viable despite procurement issues.

The summons follows a request by Kisumu Senator Fred Outa for a statement from the committee explaining “the circumstances that have made it difficult for the Lake Basin Mall to be handed over to the Lake Basin Development Authority and, by extension, the residents of Kisumu; state whether there has been any interrogation of the report of the Auditor General on the project dated January 24, 2017, and if so table the findings of such interrogation; and, confirm the validity of the reports of the State Department of Public Works and the Attorney General on the project dated August 19, 2016, and January 31, 2017, respectively.”

The LBDA management led by CEO Raymond Omollo has also been summoned by the committee and will appear on July 31, a day after the Cabinet secretary is questioned.

The matter of the Lake Basin Mall has found renewed urgency as local Kisumu leaders push for the handover of the mall to LBDA after it emerged that the expansive 60,000 square metre mall is being shunned by tenants over an Ethics and Anti Corruption Commission (EACC) investigation.

Despite a number of government ministries and agencies explicitly giving the mall a clean bill of health, ongoing investigations and the dispute between the contractor, Erdemann Property Ltd, and the government over Sh645 million the former is demanding has meant that prospective tenants have kept off due to the prevailing uncertainty.

The other outstanding issue between the contractor and the government concerns the issue of LBDA taking over the Sh2.5 billion bank loan that Erdemann took to construct the mall. In the agreement, Erdemann was financing 80 per cent of the construction and LBDA was financing the other 20 per cent. But upon handing over the mall, LBDA was to take over the commercial loan.

EACC has conducted investigations into the mall, whose cost shot up from Sh2.5 billion to Sh4.2 billion due to additional works undertaken — including construction of a three-star hotel within the mall, a tyre centre, a showroom, boundary wall and back access road. An investigation file has been forwarded to the Office of the Director of Public Prosecutions for directions.

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