WHAT’S AILING THE LBDA MALL IN KISUMU?

The Weekly Vision website has established the relentless controversies hounding the multi-billion shillings ultra-modern mall on the Kisumu-Kakamega highway is a dangerous game being played out by local politicians and cartels out to extort money from the main players in the project.

The LBDA Mall in Kisumu

The construction of the Lake Basin Development Authority Mall in Kisumu city has lately been the subject of intense investigations by the Ethics and Anti-corruption commission, EACC. The investigations have come to haunt senior government officials at the treasury, LBDA senior managers and officials of a Chinese construction firm, Ederman Properties Ltd.

The Weekly Vision website has established the relentless controversies hounding the multi-billion shillings ultra-modern mall on the Kisumu-Kakamega highway is a dangerous game being played out by local politicians and cartels out to extort money from the main players in the project. 

The project estimated to have cost Ksh 4.2 billion was premised on a finance, Build   and Transfer model. The contract to build the mall was awarded to a Chinese owned firm, Ederman Properties Ltd who in turn sought financing from Chinese Exim bank. Exim bank allegedly declined the request to fund the project under the disguise that the Kenya government had failed to demonstrate commitment in financing its part of the deal of twenty percent, yet in its final books the government is recorded to have pumped Ksh. 490 million into the project.

It is at this stage that LBDA officials, according to sources privy to the investigations, transferred the title deed of LBDA to Ederman properties. Armed with the title, Ederman secured a loan of Ksh 2.5 Billion from Co-operative Bank of Kenya.

The prevailing situation is so bad that it poses a serious threat to investor confidence considering the fact that Erdemann Property Ltd who put up the magnificent ultra-modern complex has not been refunded money they pumped in the project through a loan by the treasury. Ederman was in turn expected to settle the loan with the bank once the treasury released money as it had been agreed. It never worked out that way.

The emerging facts are that some corporate organizations especially Naivas supermarket were forced to shelve their interest in establishing a hyper-market at the mall. Just how many contractors can wait for years on end for their monies to be paid as the treasury mandarins entrenches itself in selfish intrigues? How many investors, interested in investing in the multi-billion shillings mall, have walked away as a result the intrigues? How many billions of shillings has the property been losing annually?

According to our sources from the ground the LBDA had completely failed to construct its headquarters for more than three decades until when the Co-operative Bank agreed to finance the project at a tune of Kshs. 2.6 billion that at long last they were done according to schedule by Erdemann Property Ltd.

They say that construction works on the mall started moving during the grand coalition government after being facilitated by the bank when the treasury dragged its feet to release funds for the project LBDA being a state corporation, at a time most financial institutions were shying away from investing in Kisumu.