Why NHIF risks losing 10-acre multibillion Karen land

NHIF CEO Elijah Wachira when he appeared before the National Assembly's Health committee at the Bunge Towers, Nairobi. February 15th,2024 [Elvis Ogina, Standard]

The National Hospital and Insurance Fund (NHIF) on Wednesday came under fire from legislators following revelations that it risks losing a multi-billion 10-acre piece of land in Karen to a group claiming ownership of the property.

The National Assembly’s Public Investments on Social Services, Administration and Agriculture committee is also probing how the construction cost of a multi-story building by fund was inflated from an original Sh2.1 billion to Sh3.9 billion.

NHIF Chief Executive Officer Elijah Wachira yesterday told the MPs a rival group that had been claiming the 10-acre land had been paying its land and rent rates.

Wachira said he made the discovery when officers from the fund went to make rates payments at the Ministry of Lands and at the Nairobi County Government offices. The committee heard that they were shocked to discover that an individual by the name Peter Laparaku - a representative of the rival group - had been making the payments totaling Sh514,330.

What was alarming was the fact that Leparaku had been issued with payment receipts despite the fact that a similar amount had also been paid to the government by NHIF.

“The matter has since been reported at the Karen police station and investigations are ongoing,” said Wachira.

The committee led by Navakholo MP Immanuel Wangwe was further perplexed to learn that NHIF had not paid rates between 2013 and 2023 and only did so this year.

“We came into office recently and on searching the documents, we cannot find evidence for land rates between 2013 and 2023,” added Wachira.

The committee also sought to know why the land had not been fenced by NHIF despite a 2016 court order directing it to do so.

Wachira, however, explained that the rival group invaded the land and brought down a concrete wall and arrested the security personnel on sight. The committee is now calling on the Director of Criminal investigations to probe the ownership dispute.

At the same time, the MPs have started investigating the construction of a Sh3.9 billion multi-story car park in Nairobi by NHIF. The car park is a seven-story building with 5 basement floors which is designed to accommodate 780 cars.

The project commenced in May 2002 and was scheduled for completion in August 2003 but was stretched to 2011.

Wangwe sought to know why the cost of the project had increased from Sh2.1 billion to Sh3.9 billion. 

“We need to be told what drove up the cost of the project to the point where billions were paid just for consultancy,” stated Wangwe.

The committee was also shocked to learn that NHIF had paid Sh1.4 billion for a project that did not take off prior to the construction of the car park. According to the fund’s submission, it had resorted to build a resource centre and the billions were paid towards legal fees and arbitration, feasibility study, quantity survey costs, architectural work and design, electrical engineering, civil and mechanical engineering and NCC and NEMA approvals, but the project never took off.

Instead, NHIF then opted to build the car park which also gobbled up billions.

Car park records

Records tabled before the committee show in spite of the car park having been completed in July 2008 at a total cost of Sh3,342,120,239, a further Sh626,635,998 and Sh4,706,521 was incurred in 2009/2010 and 2010/2011 respectively on the same increasing its total expenditure to Sh3,973,462,758 as at 30 June 2011.

“So, you are telling this committee that two different projects were designed and abandoned on the same land? Asked committee vice chairperson Caleb Amisi.

“We want to know why engineers were paid such a colossal sum before commencement of the project. The contractors of this project must also be summoned so they can shed more light on these charges,” he added.

Ndhiwa MP Martin Owino sought to know why NHIF had deviated from its core function of providing healthcare and prioritised projects which could have led to the loss of public funds.

“When NHIF was investing these funds, where did they get the money from? Was it from member contributions? posed Owino.

The committee directed that the NHIF appears before it again after 14 days.