Lake Basin Mall Complex loan now stands at Sh4.4bn, MPs told

Parliament has been informed that the loan facility for the constrcution of the Lake Basin Mall Complex has risen to Sh4.4 billion.

Lake Basin Development Authority Managing (LBDA) Director Wycliffe Ochiaga made the revelation to the National Assembly’s Departmental Committee on Regional Development during their tour of the mall on Saturday.

Ochiaga informed the committee that the mall’s construction was funded by a Sh2.5 billion loan facility from Cooperative Bank and the mall handed over to LBDA on April 19, 2016.

He noted that the loan remained unpaid after the handover and has since continued to accrue interest and penalties.

The mall, which currently has a 30 per cent occupation, is a revenue generating venture by the LBDA aimed at uplifting the living standards of the residents through employment and providing an avenue for conducting businesses. 

"The  unpaid loan continued to accrue interest and penalties leading to LBDA negotiating with the bank to halt accruing of interests and penalties on the project," Ochiaga said.

The committee visited the mall during an inspection tour of LBDA projects.

Committee vice chair Mary Wamaua challenged the LBDA management to enhance marketing and publicity strategies to advertise the project.

She said that people need to know about the existence of the mall and the management should look for strategies for this.

“This is a great facility that can be well utilised to benefit the people. I challenge your marketing and publicity teams to enhance advertisement of the premises and look for other lucrative ways including lowering rent rates to attract customers,”Wamaua said. 

The team further visited LBDA rice mill at Kibos where the MD called for more funding to be able to maximise the new modern rice milling machine.

Ochiaga said they intend to finance local farmers to produce foods for milling at the machine thus the need for more funding.

“We are also aware that financing is a bit of a challenge that is why we can have people come up and mop up rice here at low rates,” he said.

Ochiaga said they are coming up with a programme where they will be able to finance farmers through the financial institutions.

He disclosed that they are in partnership with NCBA, Equity Bank among other financial institutions to make farming easy for the farmers around.

“You know that preparing the land is what causes a lot of money when it comes to rice farming that is why we require more funds,” he said.

Wamaua lauded the LBDA for putting in place measures aimed at boosting rice farming in the region.

She said there are a few challenges facing the new mill in regards to the disbursement of funds for the operationalisation of the modern machine.

“They have done great although there are a few challenges, some pertaining to the money that has been appropriated to them having not been given 100 per cent,” she said.

The MP said the rice programme that set up the new mill is worth Sh75 million but the exchequer has not been able to release all the funds.

She said the committee has seen value for money for the funds, which have already been disbursed.

“Some projects have not been picked up because the money remaining is a lot and even the mill has started but not fully done,” she said.