The cost of building Hazina Towers is expected to reduce significantly from Sh6.8 billion to Sh4 billion following an audit by the department of public works.
The National Social Security Fund, which is the owner of the project, on Tuesday told the National Assembly Public Investments Committee that the earlier claim of Sh1.8 billion by the contractor has also been revised to Sh870 million.
The expansion of the building began in 2013 but stalled when Nakumatt Holdings, the then anchor tenant, filed a case to stop NSSF from doing so.
Appearing before the same committee, Labour Cabinet Secretary Ukur Yattani said the contractor — Jiangxi International — has not been informed of the revised costs.
“I foresee a long court battle over the new costs. We will need to call all stakeholders in the matter for arbitration,” Mr. Yattani said.
Ms. Teresa Maina of the NSSF board told the committee chaired by Mvita MP Abdulswamad Nassir that the contract signed with the Chinese firm allowed for variation of payments.
“The decision by Nakumatt to take us to court in 2014 is what led to the stoppage of work. NSSF is not responsible for any loss incurred by the contractor,” she said.
She told the MPs that the board is committed to protecting public money and ensuring that the project is completed quickly.
Central Organisation of Trade Unions Secretary-General Francis Atwoli also said the NSSF board and management should not be blamed for the stalling of the project and loss of public money.
“As far as Hazina Towers is concerned, we are innocent. I have a file on this project. You can contact me later if you want to peruse it,” he said.
The board, however, failed to explain to lawmakers under what terms the company is operating since the revised costs have not been communicated to it.
“The contractor is on site with a blank cheque,” Wajir West MP Mohamed Ahmed Kolosh said.
Mr. Yattani said NSSF was going through many problems.
“The people who designed the building and are no longer with NSSF should be summoned by this committee to explain some matters. The current board members might be innocent,” Mr. Yattani said.
He said NSSF is experiencing many problems because its chief executive officer has been acting for three years “meaning he cannot exercise full authority on certain matters”.
“The managers cannot concentrate on their work. They keep moving up and down, especially to Parliament, to answer questions,” Mr. Yattani said.
Initially, the tower was to have 36 floors built at Sh6.7 billion. NSSF later reduced the floors to 15.
Construction began in June 2013 and was to be completed in July 2016. It stalled for months due to the Nakumatt case.
The project is expected to be complete by the end of June 2019.