The proposed multi-billion mixed-use development housing project by the Local Authorities Provident Fund (LAPFUND) in Bellevue along Mombasa Road in Nairobi has hit headwinds after the management and a section of the board are accused of inflating the project cost by double from Sh8billion to Sh16billion, The Informer has established.
According to impeccable sources, the tendering and evaluation committee was allegedly micromanaged, influenced and coerced by top officials from the management and at board level on the “preferred highest bidder” to award having quoted Sh16.1billion.
“From the onset, LAPFUND had planned to execute the project within a budget of Sh8billion which has since been inflated and adjusted upwards to accommodate kickbacks for a section of the top management. Ultimately, the management passed the decision, albeit under pressure, to advertise the tender at a budget of Sh12billion which is almost double the initial estimates of Sh8billion; the tender was advertised and closed November 8, 2022.” An insider revealed.
However, when contacted for comment, LAPFUND Chief Executive Officer David Koross did not respond to calls, short text messages and mail sent to him by The Informer.
“The response to the tender was fairly good and majority of the bidders’ quotes ranged between Sh8billion to Sh14billion, with only three bidders quoting between Sh15billion to Sh17bilion 15 -17. I participated in the evaluation of the tender; as the tender processing committee proceeded with the evaluation, it started getting some undue pressure and intimidation from the CEO and a section of the board to disqualify some of the successful bidders whose quotes were within the initial budget and ward it to a specific bidder who has quoted Sh16, 103,401, 273.39. Even though the tender processing committee was sharply divided by this intimidation and micro management, the management took a decision to award the tender to their prefer bidder.” A whistleblowing petition says in part.
The insider whistleblower says should the project proceed, members’ contribution embezzled through inflated project.
Insiders say that at conception, the project was earmarked to cost Sh8billion but they were forced to advertise it early last month at a cost of Sh12billion.
Lapfund is a contribution scheme registered and regulated by the Retirement Benefits Act of 1997 and caters for all employees of county governments and water companies and is domiciled under the National Treasury.
The [project is set to be undertaken on plot L.R No. Nairobi Block 98/106,107 & 108 in Bellevue, Nairobi City County advertised vide tender No. LAPFUND/F1/2021-2022/4.
Sellestina Kiuluku is the board chairperson of the Fund currently controlling assets worth over Sh52billion.
“From the above background, Sh16billion which accounts for over 30 per cent of the members hard-earned contributions are at the verge of being lost through fraud and irregular tendering process.” The whistleblower adds in part.
Other housing projects the Fund has undertaken include the Sh3billion old Makasembo estate project.
“All tenders must be accompanied by a Tender Security of Sh100,000,000.00 in form of an on-demand guarantee from either a reputable bank, a financial institution licensed by the Central Bank of Kenya or an insurance company approved by PPRA. The Tender Security shall be valid for a period of thirty (30) days beyond the date of tender validity. Completed tenders must be delivered to the address below on or before 12 noon on 8th November 2022. Electronic tenders will not be permitted.” The tender document read in part.
LAPFUND senior officials and board members could soon be guests of the state as detectives drawn from the Directorate of Criminal Investigations (DCI) and the Ethics and Anti-Corruption Commission (Eacc) seek to unearth insiders say is a major rip-off.
The controversial tender has sparked divisions within the board and senior management team.
