The Public Investments Committee on Social Services Administration and Agriculture of the National Assembly convened on Tuesday, June 4th, to conduct a thorough examination of the NSSF Hazina Trade Center (HTC) project.
Under the leadership of Navakholo MP Emanuel Wangwe, the committee summoned representatives from China Jiangxi International Limited to address concerns regarding alleged fraudulent payments and the notable reduction in the originally proposed height of the office block towers, from 36 floors to 15 floors.
In attendance, Jimmy Ji, the director of China Jiangxi International Limited, provided supplementary evidence pertaining to the issues highlighted by the Auditor General in the NSSF accounts for the financial years 2019-2020 and 2020-2021.
The audit findings revealed that the HTC project in Nairobi underwent a reduction to 15 floors without a proportionate decrease in the contract price. Furthermore, the audit raised concerns over the absence of clear documentation explaining this variation.
Navakholo MP Emmanuel Wangwe, acting as the chairperson of the committee, expressed bewilderment at how constructing 15 floors could end up costing more than the initially planned 36 floors, particularly considering that the project involved the refurbishment of an existing building. He emphasized the implausibility of such a variation resulting in a 100% cost increase.
MP Joseph Wainaina further probed Mr. Ji on the rationale behind the significant reduction from 36 floors to 15 floors, especially given that construction was already underway and the Bill of Quantities (BQs) had been prepared for the 36 floors. He sought clarification on whether the BQs had to be revised due to this alteration.
In response, Mr. Ji clarified, “We are contractors and not involved in the decision-making process regarding variations. Our role is confined to on-site construction activities, and when the decision to alter the scope was made, we were in the process of constructing the 15th floor.”
Suna West MP Peter Masara raised concerns about the excess funds disbursed for work that had not been completed, suggesting that the variation resulted in an overinvestment in the project.
MP Wangwe questioned the normalcy of altering the contract from 36 floors to 15 floors without adjusting the charges to the client, underscoring the committee’s apprehensions regarding the financial implications of such significant deviations from the original project scope.
According to the audit report, the company was contracted for KSh6.2 billion for the construction works of the HTC project. Initially envisioned as a 36-floor tower, it was subsequently downsized to 15 floors at a contract value of KSh4.1 billion.
However, when construction had reached 80% completion, the contractor filed a compensation claim of KSh871.7 million, citing idle time due to work stoppages. Records submitted to the watchdog committee indicate that the Chinese company received KSh653.8 million in compensation claims.
