A parliamentary watchdog committee has questioned the proposal by the National Social Security Fund (NSSF) to put up 60,000 low-cost housing units in Mavoko through a joint venture.
The fund's acting Managing Trustee Anthony Omerikwa was at pains to explain the rationale of the investment, which would have cost the investing partner Sh300 billion to put up.
The Public Investment Committee (PIC)'s bone of contention was that in the joint venture, the Fund would take 40 per cent of the profits, with the investment company taking home 60 per cent.
The PIC members could not understand why an investor would want to pump Sh300 billion into a project when the Fund was only providing land worth Sh2.7 billion and share the profits on a ratio of 40:60.
“We are wondering what would motivate an investor to commit Sh300 billion and only get 60 per cent of profit. There has to be a motivation for that given that NSSF’s investment in project is not commensurate to the profits they would receive," PIC Chairman Eldas MP Adan Keynan said.
He continued: “Something is not adding up here and that is the hidden information that we want to be furnished with.”
Units doubled
The NSSF team appearing before the committee had earlier disclosed that in the agreement, the Fund was to only provide 1,060 acres of land valued at Sh2.7 billion.
They argued while their initial proposal was to put up 30,000 units, they were doubled when the matter went to the Cabinet for approval.
But Omerikwa found himself at the receiving end after he claimed he had never seen the proposal that was sent to the Cabinet for approval or even the initial concept paper that was taken to the Board of Trustees.
Keynan directed the team to provide documents detailing the concept of the multi-billion project within one week.
“I am hesitant to declare you and your officers here as hostile witnesses before this committee because the consequences are severe, but you must provide us with the right information to help us make a determination on the investment,” said Keynan.
The NSSF management had earlier been put to task over why they awarded the tender for the Sh7.5 billion project for their Hazina Towers project to a Chinese firm despite detecting that the company had a Sh115 million error in their tender documents.
An officer in charge of procurement at NSSF defended the Fund, saying the error was within the limits allowed in procurement law.
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