Chinese firm slaps NSSF with Sh6.9bn bill for stalled building

National Assembly Public Investments Committee members on a tour of the Hazina Trade Centre building project yesterday. photo | jeff angote 

22.March 2018

By EDWIN MUTAI
More by this Author

 Summary

• Work stopped on the 15th floor and China Jiangxi has so far been paid Sh2.5 billion for the project.
• The NSSF hired the Chinese firm to finish building the 39-storey tower, which already had eight floors, including the four that housed Nakumatt, between June 2013 and July 2016.

A Chinese contractor has slapped the National Social Security Fund (NSSF) with a Sh6.9 billion compensation claim for the stalled construction of a 39-storey building in Nairobi’s city centre.

Work stopped on the 15th floor and China Jiangxi has so far been paid Sh2.5 billion for the project.

The NSSF hired the Chinese firm to finish building the 39-storey tower, which already had eight floors, including the four that housed Nakumatt, between June 2013 and July 2016.

The troubled supermarket chain moved to court four years ago and blocked the building of additional floors above its Nakumatt Lifestyle Branch on grounds that the construction was disrupting its business.

NSSF has rejected the Sh6.9 billion claim and a consultant has recommended that the Chinese contractors be paid Sh20 million per week as compensation for the additional 94 weeks they have been on the site, translating to Sh1.8 billion.

The breakdown of the compensation includes Sh8.7 million for expenses, Sh9.8 million for idle plant and equipment at the site and Sh1.7 million for other losses.

The Public Works Ministry will in two weeks provide the rightful share owed to China Jiangxi.

“The current claim under evaluation at this moment is Sh1,890,648,193.62 which would accumulate at the rate of Sh20 million per week should the project stall again,” Anthony Omerikwa, the NSSF managing trustee told MPs on a visit to the site.

The compensation is based on an assessment by Tana & Associates, a quantity surveyors consultancy.

The NSSF has decided to cap the building at the 15 flours, lowering the construction to about Sh4 billion from the initial cost of Sh6.7 billion.

The troubled supermarket chain moved to court four years ago and blocked the building of additional floors above its Nakumatt Lifestyle branch.

The retail chain blocked NSSF contractors from reinforcing columns inside the store for additional floors.

Auditor-General Edward Ouko last year recommended legal action taken against Nakumatt to end the blockade. But the cash-strapped retailer was evicted from the building in December for failure to pay rent, paving the way for resumption of construction.

Yesterday, Mr Omerikwa told MPs that terminating the contracts will expose NSSF to costly litigation and penalties.
SOURCE