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DPP Haji wants Speaker Onyango Oloo arrested over Sh4.1b Lake Basin Mall

NYANZA
By Jacob Ng’etich | September 7th 2019
Kisumu County Assembly Speaker Onyango Oloo. (Collins Oduor, Standard)

Director of Public Prosecutions (DPP) Noordin Haji has ordered the arrest of Kisumu County Assembly Speaker Onyango Oloo over a Sh4.1 billion tender for the construction of a multipurpose mall.

John Zeyun Yang, one of the officials of a Chinese construction firm – Edermann Property Ltd – and Bobasi MP Innocent Obiri were arrested and detained yesterday evening.

Also to be arrested and prosecuted are 27 other officers of the troubled Lake Basin Development Authority (LBDA) and two private firms accused of being involved in inflating the tender by Sh1.6 billion.

The DPP accused Yang and his co-official Zhang Jing of bribing Oloo with Sh17 million and other benefits “by way of their apartments and shops in housing projects”.

Haji said the Speaker alongside a former chairman of the Finance and Establishment Committee of the LBDA board, George Odawa, were bribed to inflate the cost of the building on the outskirts of Kisumu city from Sh2.5 billion to Sh4.1 billion.

In a statement to newsrooms yesterday, Haji said he will also seek to take to court 27 others involved in the tender process.

Complaint

He said the Ethics and Anti-Corruption Commission (EACC) received a complaint on July 28, 2015 that the construction cost for the LBDA mall had been inflated. Oloo was the LBDA board chairman at the time.

The DPP also accused Odawa of receiving Sh12 million from Edermann to ensure the contract was varied.

When the mall was under construction, Haji said the LBDA irregularly approved additional scope of works in a meeting held on December 18 and 19, 2015, for additional sum of Sh620 million for construction of a showroom, tyre centre and a three-star hotel.

Further, the board allegedly approved a loan of Sh1.3 billion from Cooperative Bank by the contractor, hence enhancing the borrowing to Sh2.5 billion, despite the fact that the contractor had promised to finance 80 per cent of the project. Consequently, a deed of variation was signed by then LBDA Managing Director Peter Abok and Oloo on February 17, 2015, varying the amount from Sh2.5 billion to Sh3.8 billion without the approval and concurrence of the National Treasury.

This, Haji said, constituted a 57 per cent variation against the prescribed 25 per cent under the Public Procurement and Disposal Regulations 2013.

Variation

Following the variation, the DPP said without approvals, Abok and Oloo irregularly executed three charges over LBDA’s land titles LR No 15239 and L.R No 150443, dated March 13, 2014, January 19 and May 29, 2015 for Sh2.5 billion from Cooperative Bank.

“This singular act exposed LBDA’s property to the risk of sale in case of a default in the repayment of the loan. The charging of the LBDA property without approvals from the line ministry and Treasury was unlawful,” reads the DPP’s statement.

Haji said upon review of the file, he found that whereas three firms submitted their bids after LBDA advertised for the tender, all the firms were found non-responsive.

However, instead of rejecting their bids as required by the Public Procurement and Disposal Act 2005, the evaluation committee recommended to the tender committee the award of M/S Erdermann Property Limited (EPL).

The tender committee awarded the tender on March 14, 2013.

Subsequently, on April 8, 2013, Abok and the his then chairman David Oyosi executed the contract on behalf of the government agency, while Zhang and Yang executed for Erdermann for Sh2.45 billion.

Haji said from the start of the contract, Symbion Kenya Limited carried out the function of the consultant in the construction of the mall.

“On 19th April 2019, Symbion Limited issued a certificate of completion and taking over of the mall... The Ministry of Public Works was never involved by the LBDA at any stage in the construction of the mall,” said the DPP.

Also to be prosecuted are LBDA tender committee members Anthony Kisaka (CEO), Nelson Onyango, (production technologist) and Henry Odindo (quantity surveyor, Quantech), Emmanuel Milikau (architect, Symbion Kenya) and Moses Wekesa (consultant, Symbion Kenya).

Others are Fredrick Onyango (Chief Finance Officer), Eng Godfrey Mwangi, (Technical Service and Operation), Albert Omondi, (International Auditor LBDA), Teresia Ochaka (Supplies Officer) and Amelia Otono (Legal Officer).

Sixteen other board members will also to be prosecuted.  

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