Sh30bn NSSF development faces fresh Senate scrutiny

A multibillion-shilling construction project backed by the National Social Security Fund is facing scrutiny in the Senate, with lawmakers seeking to establish how the Sh30 billion development is being financed, who was awarded the contracts and what financial benefits workers can expect from the investment.

The investigation into the NSSF Twin Towers in Nairobi was triggered by a petition from Marsabit Senator Mohamed Chute, who wants the Senate's Labour and Social Welfare Committee to examine the project's implementation and determine whether proper procedures have been followed.

The lawmakers are seeking clarity on the use of workers' contributions in the development, particularly whether NSSF is paying for the project from its own resources or has entered into a public-private partnership (PPP) with private investors.

Chute has raised concerns about the transparency of the undertaking, arguing that the public needs a clear account of the money committed to the project and the parties responsible for delivering it.

“This inquiry is prompted by the need for transparency and accountability on the project execution,” Chute said.

He wants the committee to establish the total projected expenditure, the scope of the construction and the structure of the financing arrangements.

The senator has also asked lawmakers to identify the firms contracted to undertake the work, disclose the amounts involved in each agreement and explain the checks conducted before the contracts were issued.

“The committee should name them [contractors], disclose their contract values and explain the due diligence conducted before awarding the contracts.

The inquiry is also expected to establish how much money has already been committed and paid out, what financial obligations are yet to be settled and the terms governing any loans linked to the project.

Where private investors are involved, Chute wants the committee to disclose the arrangements governing the sharing of revenue between the parties.

The lawmakers will also examine whether the development has met the required regulatory conditions, including the preparation of feasibility studies and environmental and social assessments.

In addition, the committee is expected to investigate the safeguards put in place to ensure construction standards are maintained and to prevent unnecessary expenditure, delays and irregular changes to contracts.

The questions come as NSSF advances plans to develop the property at the intersection of Kenyatta Avenue and Uhuru Highway in Nairobi's central business district.

NSSF managing trustee and chief executive officer David Koros said in February that the land had remained unused for years and that the project was intended to generate value from the property for the benefit of contributors.

“That land has been idle for years and has not been giving contributors any benefit. It is valued at about Sh4 billion and our objective is to unlock that value,” Koros said in February.

The planned development will comprise two towers, with the larger building expected to reach 60 floors and a height of about 260 metres. Upon completion, Tower A is projected to become the tallest building in East and Central Africa.

The second building, Tower B, is planned to have 35 storeys and stand approximately 140 metres high.

The development is designed to accommodate a range of commercial and residential facilities, including high-end office space, a business hotel, serviced apartments, shops and conference facilities.

It will also feature an observation deck on the 56th floor, while parking facilities are expected to accommodate about 1,150 vehicles.

The scale of the project has drawn attention to the need for NSSF to demonstrate that the investment is financially sound and capable of delivering returns that justify the resources committed to it.

Kakamega Senator Boni Khalwale has backed the demand for greater scrutiny, saying the fund should account for its investment decisions and assure contributors that their savings are not exposed to unnecessary risks.

Khalwale pointed to reports that NSSF had invested in the Nairobi Expressway, Kenya Pipeline and the Rironi-Mau Summit Road project, calling for information on the performance of those investments.

“We have heard that they have invested in the Nairobi Expressway, Kenya Pipeline and Rironi Mau Summit Road, which is okay as long as there is a guarantee that no money will be lost,” he said.

“We want to know what the return on that investment is.”

Khalwale also raised questions about the reported involvement of a public-private partnership in the towers project, adding to concerns over the arrangement being used to finance the development.

The Senate inquiry will seek to establish the financial and contractual details behind the project while examining the measures in place to protect NSSF's resources.

The investigation places the spotlight on how the fund manages workers' contributions, the risks attached to its investments and whether the Sh30 billion development is being carried out under arrangements that safeguard contributors' interests.