LBDA boss raises concern over Sh4.5 bi*lion loan
The interest from Sh2.5 billion loan Lake Basin Development Authority (LBDA) took 10 years ago to build Lake Basin Mall Complex, in Kisumu City, has accrued to Sh4.5 billion, Managing Director Wycliffe Ochiaga has disclosed.
Ochiaga told National Assembly Committee on Regional Development Authorities that the Mall’s construction which was funded by a loan facility from Co-operative Bank was completed and handed over to LBDA on April 19, 2016.
“The loan remains unpaid even after the handover and continues to accrue interest and penalties,” he told the MPs who were on a tour of the facility at the weekend. However, Ochiaga said LBDA is negotiating with the bank on how to deal with the accruing interests and penalties.
“The outstanding bank loan which now stands at Sh4.5 billion, inclusive of interest and penalties poses a big challenge to the Mall management,” he explained.
Currently, the Mall which was expected to generate an additional revenue to LBDA and create more wealth and employment opportunities for the residents is fighting to get an anchor tenant.
It is now only 30 per cent occupied with a lot of business spaces still wasting away, thus dipping the revenue returns envisaged at the project’s inception.
The LBDA management was looking at making not less than Sh100 million or more from the facility business proceeds, annually, a dream which at the moment remains a mirage.
The Mall is now one of the biggest parastatal entities housing several offices, supermarkets, and other businesses including Best Western Hotel, although the occupancy is still very low with 70 per cent of the space still vacant. So far, only a few government offices have moved and occupied part of the 30 per cent space which is currently in use. They are Kenya Revenue Authority and ICT Authority among others.
Vice-Chair of the Committee and Maragua MP Mary Mawua challenged the management of LBDA to enhance strategies to market the Mall as a modern business complex. “We want as many businesses as possible to know about the existing spaces at the Mall where they can come and set up to boost your targeted tourism flows,’’ she said.
She was flanked by Paul Abuor, (Rongo), Joseph Cheruiyot (Kipkelion East), Majimbo Kalisanga (Kabuchai), Peter Nabulindo (Matungu) and Farah Yakub (Fafi).
