29 June 2013

Kenya: Kibaki Office Price Was Inflated By Sh220 Million

THE intended acquisition of an office for retired President Mwai Kibaki for Sh700 million appears to have included an inflated amount of Sh220 million for purchase of the property.

Two weeks ago the parliamentary Budget and Appropriations Committee shelved the allocation of Sh700 million for the office that it had spotted tucked under development expenditure for the Cabinet Office in the Supplementary Budget estimates books.

Later the Budget and Appropriations Committee, chaired by Mbeere South MP Mutava Musyimi, approved Sh250 million for the acquisition of an office block for Kibaki.

But it now appears that the Cabinet Office was aware all along that it would not be necessary to spend Sh700 million. In February a valuation committee, mandated by the Cabinet Secretary Francis Kimemia, submitted a confidential technical report on a property in the upmarket Nairobi suburb of Gigiri.

The report valued the large 1960s house on a 3.1 acre rectangular plot at Sh230 million. The price included a five bedroomed double storey building, a swimming pool, servant's quarter and garage for two cars.

"The building is structurally sound with no major structural defects," said the report. "The site is centrally located and is enough to accommodate future expansion."

The house along Gigiri road, off Limuru road, is near the Canadian and Rwandan embassies as well as the UN complex. "The existing building can be renovated to accommodate the intended use," the technical committee advised Kimemia.

The report indicated that the building was being considered for senior officers presently in cramped offices in State House and Harambee House.

But a suburban office would obviously be more suitable for a retired president than for senior civil servants who are expected to work in Nairobi's CBD.

In mid-June an official from the Office of the President, Stephen Kiragu, told MPs on the Budget committee that three buildings had been considered before the Gigiri building was identified.

Earlier this year there were reports that the Royal Garden Hospital in Lavington has been earmarked for Kibaki's retirement office.

Kiragu advised the MPs that the purchase price for the land and the buildings was Sh450 million. The request for Sh700 million assumed that an additional Sh250 million would be spent on refurbishment of the existing building and and construction of a new office block for Kibaki's staff.

The National Assembly eventually approved Sh250 million, which would leave just Sh20 million for refurbishment if the Gigiri house is purchased for Kibaki.

The Presidential Retirement Benefits Act provides that a suitable office space, not exceeding one thousand square metres, be provided to a retired president. The Gigiri building comprises 360 square metres.

"Subject to the terms of reference, prevailing economic conditions and our general remarks, we value the freehold interest in L.R. NO. 7258/46 free from any encumbrances at KSh230,000,000 only," stated the report submitted to Cabinet Secretary Francis Kimemia on February 22.

The Cabinet Office committee was chaired by Patrick Bucha, Director Estates Management, and included Chief Quantity Surveyor Moses Nyakiongora, Chief Engineer Structural Mbiu Kimani, Chief Electrical & Mechanical Engineer Raphael Okubo, Senior Deputy Commissioner of Lands (Valuation) Anthony Itui, Chief Architect Cosmas Maweu, and Senior State Counsel Seth Masese.

Gem MP Jakoyo Midiwo tabled the report in the National Assembly but warned that it was illegal to inflate the figures provided for in the report.

"The chair and the budget committee reduced the monies allocated. But there is fraud involved even in that deal. I want to table before this House that the valuation of that house alone is only Sh230 million and somebody out of audacity, a daring mandarin, put Sh700 million and teachers are earning peanuts. It's a big shame!" said Midiwo.

At the time, Business Daily newspaper quoted Kimemia as saying Sh700 million was a reasonable price for an office as it was difficult to acquire them for less than Sh1 billion in Nairobi.

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