Row over NSSF's billions hots up

By Luke Anami

Investigation of the National Social Security Fund by a parliamentary committee has taken fresh twist after two men featuring prominently in the probe broke their silence.

Mr Alex Kazongo, the former NSSF managing trustee, claimed the Fundfs board ordered the payments now being investigated by the Public Investment Committee (PIC).

At the same time Lugari MP Cyrus Jirongo, a former operative of the now defunct Youth for Kanu, alleged the former government, which lost to Narc in the 2002 elections, influenced NSSF to cancel a housing development contract with his company Sololo Outlets Ltd, for Hazina, Nairobi after he fell out with the party.

Lugari MP Cyrus Jirongo [Photo: File/Standard]

"What the NSSF is deliberately failing to tell Kenyans is that the pressure they faced to cancel the contract was purely political, and was directly connected to Cyrus Jirongofs fallout with the powers that be after the 1992 General Elections," he said.

The claim by Jirongo was conveyed to newsrooms in a written statement in which he alleged the controversial payments of Sh1.4 billion made to Pan Africa Builders & Contractors (Sh590 million), Mugoya Contractors (Sh342 million) and Sololo Outlets (Sh490 million) were justified.

"It is important for Kenyans to know that the root cause of the Sololo vs. NSSF case is the abuse of public offices by government officials for political reasons. Using government machinery to destroy private business, using political muscle to rob a Kenyan citizen just to cut him to size politically is reprehensible and morally unacceptable," Jirongo claimed in his statement to the media.

Cancellation of contract

While acknowledging circumstances under which he entered into agreement with NSSF of construction of Hazina Estate, he accused the Fund of hiding the reasons that led to cancellation of the contracts.

"Our major point of diversion is the statement that the cancellation on 26th May, 1993 was caused by Sololofs demand of Sh2.65 billion which was in excess of the agreed consideration. We would have appreciated more candour from the NSSF on the truth behind the cancellation," Jirongo said in the statement.

He was referring to an advert in The Standard on Thursday by NSSF acting managing trustee Tom Odongo in which he sought to explain the circumstances surrounding the housing development contracts that were cancelled.

But Jirongo accused Odongo of twisting the facts behind the matter.

"Itfs interesting that after Sololo was kicked off the project due to political pressure, and with 75 per cent of Hazina Estate done, they awarded Mugoya Construction the contract to complete the 25 per cent for Sh1.5 billion. This figure was in fact over the variation Sololo had requested," he said.

On his part Kazongo said he only implemented what the NSSF board demanded, and denied pledging to pay Sololo Outlets terming the reports inaccurate and misleading.

"My attention has been drawn to inaccurate and misleading reports attributed to the Acting Managing Trustees (MT) of NSSF that appeared in sections of the local press on Thursday. The Acting MT was quoted as saying that I made an unwritten pledge to review Sololo Outletfs claim after NSSF paid them Sh490 million as full and final settlement of their claim," Kazongo said in a written statement.

"I wish to clarify that no unwritten agreement was made by me. I also find it irresponsible for the Ag MT to contend that such huge sums of money could simply be pledged verbally without committing any trace of writing."

Board approval

Kazongo said only the board can authorise payments of such sums.

"After obtaining Board approval to pay Sololo Outlets and Mugoya Construction their claim in full and final settlement, my role as the Managing Trustee was to implement the Boardfs decision, that is, to effect payment. Moreover, in terms of the Fundfs existing policy the Managing Trustee can only approve legal payments up to Sh3 million. Any payments above that limit must be approved by the Board," he said.

According to Kazongo, payments were made in two equal installments to ease strain on the Fundfs cash flow.

"It is relevant to note that first installments were made before I proceeded on leave, while final installments were done after I had proceeded on leave with effect from 17th February, 2012."

He said he wished "to urge both the Board Chairman and Acting MT of NSSF to uphold truth and integrity all the time and stop hiding in the shadow to issue misleading statements simply because I am on leave and therefore unavailable at their meetings".

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