Eric Mutua: Jubilee using ‘rebel’ lawyers to weaken LSK

Members of Law Society of Kenya (LSK) unanimously ratified a motion to defeat the move for construction of a Sh1.25 billion arbitration centre in South C.

The move was not welcomed by the society’s leaders, but the majority of lawyers carried the day during their Annual General Meeting in Nairobi on March 21.

It is emerging that the lawyers are convinced the project is overpriced and now want their leaders to step aside pending investigations into claims of misappropriation of funds.

“We are interested in transparency and accountability regarding findings contained in our report on the arbitration centre” said Edwin Sifuna, an advocate.

LSK’s Chairman, Eric Mutua (pictured), has termed the protesting lawyers as agents of a plot by Jubilee to weaken the LSK, even though there are underlying disputes on the project.

Nema estimated the construction cost at Sh0.28 billion, LSK members figure the project will sink Sh0.608 billion, the architect puts the bill at Sh0.65 billion, while the LSK leadership has budgeted for Sh1.25 billion.

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Members have questioned why the four-storey building, located away from the more prime city centre, will be pricier to put up than the 12-storey Union Towers that was sold for Sh800 million or the 17-storey I&M Bank Tower valued at Sh1.2 billion.

About Sh90 million has been allocated for land, yet the property reportedly belongs to the society. “Unless that amount is being allocated to the society as their equity or contribution, it should not appear there when establishing the actual amount to borrow for the project,” the protesting lawyers under the banner OkoaLSK claim.

Members have questioned the loan negotiation fee, which was allegedly put at 1.5 per cent, yet the banks quoted 1 per cent. This will cost LSK Sh10.8 million more.

Jacqueline Manani who moved the motion claims the parking space has also been overcharged by more than Sh89 million.

Manani claimed Sh189 million has been allocated for the 220 parking slots that if determined using the industry average cost would not cost more than Sh100 million.

“Going with the figure of Sh80,000 per square metre, each parking will eventually cost us Sh97,843 per square metre. Each parking will cost us Sh1,223,040. This figure does not include 16 per cent VAT, value of land, relevant approval fees and financial costs during the construction period” said Manani.

Members claim the cost exceeds the charges for similar bays in Upperhill and Ngong Road, where the cost of a parking bay ranges between Sh1 million and Sh1.5 million for a period of 99 years.

“How can the cost of constructing your own parking on your own land cost you more than buying one” posed Manani.

Also after the architect based his fees at 1 per cent of the project cost, about Sh7.56 million was paid out between December 7, 2012 and May 20, 2013. But the money was allegedly not featured in the financial statements for the year ending December 2013.

During the AGM, members demanded to debate on the project, but rifts emerged, forcing Mutua to call off the meeting. Members proceeded with the meeting with Assa Nyakundi acting as the interim chair. They approved a motion to suspend the project.