The intrigues behind the Lake Basin Mall and the EACC riddle

Lake Basin Development Authority (LBDA) Mall in Kisumu County.

A multi-billion-shilling mall, which is at the centre of an investigation over building costs, is struggling to find tenants.

When construction of the Sh4.2 billion Lake Basin Mall kicked off six years ago, it was hoped that it would spur the local economy through the creation of hundreds of jobs.

The Lake Basin Development Authority (LBDA), which owns the mall, had been projected to raise about Sh230 million in rent each year for leasing out business space.

But trouble started soon after the complex was completed when detectives from the Ethics and Anti-Corruption Commission summoned senior LBDA officials to explain inflated construction costs.

A spot check by The Standard established that only the Communications Authority and a handful of shops are open for business at the mall, which measures about 60,000 square feet.

The five-floor complex, which stands on an 80-acre piece of land at Mamboleo junction, has about 140 shops, a hotel, showrooms, and a 335-car parking area.

LBDA Managing Director Raymond Omollo blamed the low occupancy on the construction of the Kisumu-Kakamega highway, which he claimed had blocked easy access to the complex.

“The mall is ready for occupation. The hotel will be occupied by a tenant by the end of this month,” said Mr Omollo.

He continued: “The opening has been delayed by the construction of the dual carriage but we have engaged with the Kenya National Highways Authority who have promised that the road will be completed by August.”

There are questions about how much space has been leased after LBDA officials gave conflicting figures. While former authority boss Evans Ateka had said that 40 per cent of the mall was taken, Omollo said that only 20 per cent was occupied.

Budget exceeded

On Tuesday, EACC officials confiscated documents from the homes of former LBDA chairman Onyango Oloo as part of their investigations into why construction of the mall grossly exceeded its budget.

The anti-graft agency estimates that nearly Sh2 billion could have been stolen due to inflated costs.

The initial cost of constructing the mall, which was built through a partnership between LBDA and Erdermann Properties, a Chinese developer, on a 20:80 basis, had been capped at Sh2.5 billion.

Following the raid, Mr Oloo recorded a statement with the commission about the documents that were recovered from his homes in Kisumu and Nairobi.

He maintained that he was innocent and that no fraudulent payments were done during his tenure as chairman of the authority.

“EACC has a right to investigate the construction of the mall, but I am persuaded to believe that I am innocent,” said Oloo.

He, however, regretted the slow progress in attracting tenants to occupy space in the mall.

“We all want to see the mall operational. It is capable of spurring the economy of this region,” said Oloo.