By Paul Wafula and David Odongo
Kenya: On June 20, 2012, Osman Elsek (right), a Turkish investor, suffered a heart attack after he was informed that Presbyterian University of East Africa (PUEA) had refused to pay Sh226 million it owed him for construction work he had done at the institution.
He was rushed to Aga Khan Hospital where he stayed for two weeks. “I was so shocked that someone, especially a church, could refuse to pay me,” says Elsek.
Elsek, through his construction company, Elsek and Elsek Construction had entered into a contract with PUEA to build offices, classrooms and laboratories. The university had earlier sent out a bid, inviting all interested companies to apply for the tender.
Elsek agreed to start the project on a BOT (buy, operate and transfer) terms.
Documents in our possession reveal that Elsek was to construct the buildings and then transfer them to the university, upon completion. The company was to be paid a total of Sh89 million over a period of 40 months.
From the contract, PUEA was to pay Sh81 million every four months and the last payment would have been on October 28, 2014. Elsek sued PUEA for breach of contract. “I was shocked that they in turn sued me for demanding money from them,” says Elsek.
The suit by Presbyterian University was heard before Justice Eric Ogola of the High Court at Milimani who threw out the case, and ordered PUEA to settle the Sh226 million it owes. In his ruling, Justice Ogola said the university had not given sufficient evidence that Elsek construction had breached the contract.
He further noted that the university was also in breach of some obligations as it issued post-dated cheques to Elsek and Elsek, which were dishonoured.
