Kenya: MP Momanyi, Kisumu Assembly Speaker Oloo Due in Court Over Inflation of Lake Basin Mall Cost

9 September 2019

Nairobi — Bobasi MP Innocent Momanyi and Kisumu County Assembly Speaker Onyango Oloo are among individuals due in court on Monday in a graft case over the inflation of the construction cost of the Lake Basin Mall in Kisumu.

The two will be charged alongside Erdemann Property Limited Managing Director John Zhang who is also in police custody following his arrest on Friday.

They are accused of inflating the cost of the mall from an initial figure of Sh2.5 billion to Sh4.1 billion.

Momanyi and Zhang were arrested by Ethics and Anti-Corruption Commission (EACC) detectives on Friday in relation to the alleged fraud while Oloo presented himself to police on Saturday.

They are among 33 individuals being sought and two private firms that are accused of being involved in inflating the tender by Sh1.6 billion shillings.

While recommending charges against the Lake Basin Development Authority (LBDA) officials, the Director of Public Prosecutions (DPP) Noordin Haji said Oloo, the former Chairperson of LBDA received a Sh17 million bribe to allow the inflation of the tender for the construction of the mall from an initial figure of Sh2.5 billion to Sh4.1 billion.

Haji said the inflation of the tender was a violation of procurement statutes and contrary to the Anti-Corruption and Economic Crimes Act.

Following the finalization of the probe conducted by the Ethics and Anti-Corruption Commission (EACC), Haji recommended a total of eleven charges against a Chinese contractor and 27 current and former LBDA officials.

Oloo and LBDA Managing Director Peter Aguko Abok are said to have signed a Deed of Variation in February 2015, varying the cost of the construction of the mall from Sh2.5 billion to Sh3.8 billion, stretching the difference by 57 per cent which is above the 25 per cent allowable variance in the Public Procurement and Disposal Act.

Abok is accused unprocedurally approving additional works to the tune of Sh 1.3 billion in December 2014 in addition to the Sh2.5 billion that he had already committed in April 2013.

Abok and Oloo are said to have signed a Deed of Variation in February 2015, varying the cost of the construction of the mall from Sh2.5 billion to Sh3.8 billion, stretching the difference by 57 percent which is above the 25 per cent allowable variance Public Procurement and Disposal Act.

The two also executed charges on a parcel of land belonging to LBDA for Sh2.5 billion from the Cooperative Bank in March 2014, January 2015 and May 2015 without the approval of the Ministry of Transport, Infrastructure, Housing, Urban Development and Public Works, and the National Treasury.

According to Haji, the Evaluation Committee in March 2014 irregularly recommended to the Tender Committee, the award of the tender to Erdemann Property Limited, a firm that had been found to be nonresponsive during the evaluation process as were two other entities which also submitted bids.

LBDA Tender Committee members Onyango Chere (Chief Finance Officer), Godfrey Mwangi (Manager Techical Service and Operations), Albert Omondi (Internal Auditor, Teresia Ochaka (Supplies Officer) and Amelia Atieno (Legal Officer) will also be prosecuted.

Other LBDA officials facing arrest are George Odawa, Anthony Kogo, David Oyosi, John Mango, John Collins Onyango, Boniface Simba and William Omoding, Jimmy Nabwera, Alex Mukabwa, Mary Goima, Kennedy Musembe, Michael Obora, Joash Odhiambo, Dennis Mulaa and Josiah Okumu, all of whom are board members of the State agency.

Odawa is said to have received a Sh12 million bribe to allow the variation of the contract.

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