[Photo/Business daily ]
The taxpayers will have to pay Sh500 million to Co-operative bank so as to stop the auctioning of the Lake Basin Development Authority (LBDA) shopping complex in Kisumu over the unpaid dues.
A special parliamentary committee set to review the mini-budget agreed to allocate the amount through the modified supplementary budget so as to prevent LBDA headquarters from being over run by the co-operative bank.
“The committee recommends an increase of Sh500 million to the Lake Basin Development Authority for the payment of pending bills,” said Joseph Limo, Kipkelion East MP, who chaired the committee.
The mall was to be built through a partnership between the LBDA and the developer (Ederman Properties Limited) on 20:80 basis such that the government was to fund 20 per cent of the project on completion while the developer funds 80 per cent.
However, the developer failed to secure the Sh4.1 billion from the Chinese Exim bank and thus owing the government failure to pump the 20 per cent to the project.
It is then that the LBDA board entered into an agreement with Ederman properties limited to have it borrow Sh2.5 billion from the Co-operative bank through its title deed.
Business Daily said the title deed which contains the mall and headquarters was later taken by co-operative bank that had threatened to auction the mall forcing the treasury to come to its aid thus allocating Sh1 billion so as to settle the debt.