The National Social Security Fund has announced plan to build an hotel, convention centre and rental apartments on a prime parcel of land in the CBD.
The move will whitewash earlier efforts by the pension fund to sell the land - a block of five plots in a row - to Indian billionaire Mukesh Ambani's firm Delta Corp East Africa, a deal that collapsed when it emerged that the acreage had been overstated in the title deeds.
The vacant plot, which lies between Laico Regency and Kenyatta Avenue, is at present used as a day-time parking lot.
NSSF had in 2007 put up the plots for sale as one way of reducing its property portfolio to meet the maximum 30 per cent requirement for pension fund assets as stipulated by the Retirement Benefits Authority.
Ambani's Delta Corp bid to buy the plots at Sh2.8 billion and paid 10 per cent of the price after the bid was accepted. The deal however collapsed after it established that some of the plots were smaller than indicated on the title documents.
The ensuing dispute necessitated the opening of a separate account between the lawyers of the two parties where Delta Corp deposited the remainder of the sale price awaiting settlement of the issue.
The then NSSF managing trustee Rachael Lumbasyo and former company secretary Juma Chitembwe were prosecuted for abuse of office as they were thought to defraud the State corporation of the funds, but were acquitted in late 2011 for lack of sufficient evidence. The court ruling stated that evidence showed all parties intended to complete the transaction.
Delta Corp reportedly intended to build a luxury hotel property on the land.
NSSF's board of trustees chairman Adan Mohamed announced the new plan on Monday, saying the investment will herald the State firm's entry into the meetings, incentives, conventions and exhibitions tourism segment.
"The convention centre will be developed alongside a high-end luxury hotel property incorporating rental apartments at the prime city plot," NSSF said in a press statement.
The fund is also shoring up its investments to other sectors, with the intention to sail in the uncharted waters of public-private partnerships in energy generation and infrastructure development. NSSF is currently managing about Sh120 billion in member contributions.