The National Assembly’s Public Investments Committee on Social Services Administration and Agriculture convened on Tuesday, June 4 to scrutinize the NSSF Hazina Trade Center (HTC) project.

The Navakholo MP Emanuel Wangwe-led committee summoned representatives from China Jiangxi International Limited to address concerns about fraudulent payments and the reduction of the proposed office block towers from 36 floors to 15 floors.

Jimmy Ji, the director of China Jiangxi International Limited, appeared before the committee to provide additional evidence concerning the issues raised by the Auditor General in the NSSF accounts for the financial years 2019-2020 and 2020-2021.

The audit report showed that the HTC project in Nairobi was scaled down to 15 floors with no significant reduction in contract price. The audit also said that there was no clear paperwork explaining the variation.

MP Wangwe noted the peculiarity that building 15 floors ended up costing more than the initially planned 21 floors, despite the project involving the elevation of an existing building. He emphasized that such a variation should not result in a 100% cost increase.

“What made the 15 floors more expensive than building the 21 floors? Even if there were variations, it cannot be 100%,” questioned MP Wangwe.

MP Joseph Wainaina further interrogated Mr. Ji on the rationale behind the drastic reduction from 36 floors to 15 floors, especially since the work was in progress and the Bill of Quantities (BQs) was prepared for the 36 floors. He inquired if the BQs had to be revised due to the variation.

Responding, Mr. Ji stated, “We are contractors and not involved in the decision-making of the variations. We are just on-site for construction purposes, and when the decision of variation was reached, we were building the 15th floor.”

Suna West MP Peter Masara inquired about the excess funds paid for work not completed, suggesting that the variation led to an overinvestment in the project.

“Is it normal to vary the contract from 36 floors to 15 floors without you charging the client?” Asked MP Wangwe, underscoring the committee’s concerns about the financial implications of such significant changes to the project scope.

The company, according to the audit report, was awarded a KSh6.2 billion contract for construction works of the HTC.

The project included the elevation of the then-existing building into a 36-floor tower. This would have made HTC the tallest building in the country.

However, the HTC project was scaled down to 15 floors at a contract of KSh4.1 billion.

But when construction works were at 80%, the contractor filed for KSh871.7 million compensation, citing idle time arising from work stoppages.

Records provided to the watchdog committee indicate that the Chinese company was paid KSh653.8 million in compensation claims.