How KNBS paid Sh163 million rent for building it never occupied – Business Daily

KNBS director-general Macdonald Obudho. PHOTO | LUCY WANJIRU | NMG
The national statistics agency is on the spot over expenditure of about Sh290,000 daily for rent and service charge for office space it did not occupy.
In total, Kenya National Bureau of Statistics (KNBS) paid Sh163,083,000 for the period between October 2017 to June 2019.
The National Assembly’s Public Investments Committee (PIC) took the KNBS to task to explain why it is spending huge sums of money on rent.
“Why are you paying about Sh290,000 a day for rent? Don’t you think this is a very high figure?” Abdulswamad Nassir, who chairs PIC asked.
The KNBS director-general Macdonald Obudho agreed the figure was high but shifted the blame to the Ministry of Public Works which recommended the rental estimates.
He said Public Works gave the estimates during the procurement of the office space.
“I am in agreement that the rent is high. But the Ministry of Public Works gave the estimates. I was not there but my predecessor was Zachary Mwangi,” he said.
Auditor-General Nancy Gathungu questioned the irregular procurement of rental space. She said KNBS leased office space at a total rent of Sh105,300,000 per year from January 2018 including service charge.
The landlord offered a 90-day grace period from the signing of a letter of offer to allow for preparations of the space before occupation.
The grace period was, however, not sufficient for the procurement process for the contractor and completion of the works to ready the building for occupation.
“As a result of a lease agreement that was skewed in favour of the landlord, the bureau paid rent for the period between October 2017 to June 2019 of Sh163,083,000 while the building remained unoccupied with no value for money achieved, hence misuse of public resources,” Ms Gathungu said.
Consequently, she said the Bureau was in breach of law.
Mr Obudho said the process of acquiring the office space was competitively done through an open tender, resulting in a lease agreement.
“The bureau took over the office space immediately the rental contract was signed with the lessor,” he said.
Mr Obudho said the bureau occupies 10 floors at Herufi House.
He was hard-pressed to explain why the KNBS paid the extreme amount without taking possession of the property.
“It is abnormal and extremely immoral to pay these huge amounts without taking possession of the office space. The issue raised by the Auditor-General on value for money is serious,” Ahmed Abdisalan, the committee vice chairperson said.
He directed Mr Obudho to provide detailed information relating to the procurement of the office space.
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