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City’s low-cost housing plan in doubt over ‘illegal contracts’

The planned regeneration of seven Nairobi estates has been thrown into further confusion after Nairobi MCAs raised concerns over the legality of the contracts signed between City Hall and the investors.

The Planning and Lands Committee revealed that contracts for the construction of the low-cost houses in seven city estates were signed without being based on any housing policy, making them an illegality.

The Committee noted that it is only now that the Assembly is in the process of coming up with a county housing policy, which is set for the last reading next week, and wondered which law was used in the process.

The estates that are to be developed include Ngong Road phases I and II, Uhuru Estate, New Ngara, Old Ngara, Suna Road, Jeevanjee and Pangani.

SIGNED ILLEGALLY

The watchdog committee expressed concerns that the contracts for the Urban Housing Renewal projects could have been signed illegally because they were not anchored in any law.

“At no point did the Assembly pass or ratify that the county could do any transaction involving land. So the policy used to sign the contracts was not ratified by the Assembly and so they are null and void,” said the committee’s chair Anthony Kiragu.

Baba Dogo MCA Geoffrey Majiwa faulted the developer for not doing due diligence to ascertain whether the county had a policy in the first place, as is required by law, before signing the contract. He insisted that the contracts must be aligned with the county policy or risk being declared null and void.

“What we are doing now is addressing the anomalies that should have been fixed before the contracts were signed. Once the policy is implemented, it could lead to the contracts undergoing minor adjustments,” said Majiwa.

Lands and Housing executive Charles Kerich, however, said that the county has only signed addendums and is still in the process of negotiating with the contractors.

The committee also revealed that the various developers were awarded different contracts, even though they all responded to a uniform Request for Proposal (RFP).

The county had said that the joint venture unit-sharing ratio would be 70:30 in favour of the developer but it was disclosed that Erdemann, a company involved in the regeneration of Ngong Road estates Phases 1 and 2, had a ratio of 84:16.

CHANGED DESIGN

Nonetheless, one of the directors of Erdemann Company, Mr Zebin Yang, defended the contract saying that the county even renegotiated the ratio from the previous 82:18 after they changed the design of the original plan from 4,068 housing units 5,085 units.

He said that the ratio was proportional to their contribution to the project where the county is only providing the land, totalling to 25 acres valued at Sh8 billion, while they will input funds totalling to Sh48 billion for the two phases.

Mr Yang said that the contracts for the two phases were signed by former County Secretary Peter Kariuki and former county attorney Lydia Kwamboka on behalf of City Hall.

It also emerged that the contracts have a confidentiality clause, which goes against Article 35 of the Constitution on access to public information.