BY MANUEL ODENY
The hearing has proceeded at a Magistrates Court of a case in which former executives of Lake Basin Development Authority are facing Sh4.1bn corruption charges in relation to the construction of Lake Basin Mall in Kisumu.
The Milimani Anticorruption Magistrate Zipporah Gichana proceeded with the hearing on the case pitting former executives over the case.
The Director of Public Prosecutions said the project was to cost Sh2.5billion but was inflated to Sh4.1bn as the accused persons allegedly inflated the tender by Sh1.6bn with some allegedly receiving bribes to inflate the cost of the building.
Richard Mwarema, a chief economist earlier had testified saying the construction of the mall was marred with irregularities as among other things value for money was not properly demonstrated and that the project lacked the necessary approvals for it to commence.
Mwarema was part of a team that prepared a report on the LBDA mall project following a memo dated August 2016 from his boss Planning PS Saitoti Torome.
He testified against former Kisumu county assembly Speaker Onyango Oloo, LBDA Managing Director Peter Abok, the Board of Directors of the Lake Basin Development Authority, the consultants and the main contractor-Ederman property.
Mwarema said the report came after a site visit in 2016 where they met the Authority’s management, co-financiers and officers from cooperative banks who were financing the project and perused through documents.
The findings was that if LBDA was to undertake private public partnership they ought to have sought the approval of public oversight authority.
This approval was lacking in the project. The project, he said, was not properly conceptualized and that LBDA did not consider all risks involved.
“After looking at procurement documentation, our findings on negotiations of evaluation report was that the negotiation criteria were not specified in the tender document. It was not specified but it was still done. That was contrary to the law,” said the witness.
Mwarema further indicated that LBDA did not seek the necessary legal advice from the Attorney General’s office to proceed with the contract and that there was a payment of Sh280 million to Edermann before the formal agreement was signed on May 18, 2020.
The report was subsequently forwarded to the Attorney General and the Auditor General for further action.
An earlier witness-James Kilaka-testified in court saying the original plan of the mall was altered from the acreage of land to accommodate an additional showroom and a 3-star hotel. The court heard that the board approved the increase of Sh620 million and another Sh680 million.
The components which brought about the Sh680 million were the showroom, tyre centre, and perimeter wall among other things.
This approval, the witness said, should have been approved by the tender committee and not the board. The approval of these additional sums is what brought about the variation of the original contract of Sh2.5bn.
The contract was varied by 57 per cent from the initial Sh2.5bn to Sh3.8bn.
Lake Basin Mall is arguably the biggest mall around Kisumu, Western circuit and Rift Valley region combined covering over 60,000 square metres office space with a 350 parking space on two floors.
