Loan
The Lake Victoria Development Authority (LBDA) is struggling to resettle a Sh. 2.5 billion loans borrowed from Cooperative Bank to finance the construction of Lake Basin Mall in Kisumu City.
LBDA Managing Director (MD) CPA Wycliffe Ochiaga told the National Assembly Departmental Committee on Regional Development that the loan has since accrued interest and penalties with the total amount demanded by the bank reaching Sh. 4.5 billion.
Ochiaga said construction of the mall, which is one of the largest in Western Kenya started on 7th August 2013 and was completed and handed over to LBDA on 19th April 2016.
Occupation of the mall which is a revenue generating venture for the authority, he said, currently stands at 30% hampering efforts to service the loan facility which was disbursed between 2013-2015.
“The loan facility for the project remains unpaid after the handover and has continued to accrue interests and penalties. However, LBDA has negotiated with the bank to halt accruing of interests and penalties on the project”, said Mr. Ochiaga.
The MD cited accessibility as the biggest challenge keeping off tenants saying a section of the Kisumu-Kakamega Road leading to the main entrance of the mall has taken too long to be completed.
Currently, the mall which was expected to generate more than Sh. 100 million in revenue annually and create employment opportunities for the locals is struggling to get an anchor tenant. So far only a few government departments and parastatals among them the Kenya Revenue Authority (KRA) and Communication Authority of Kenya (CAK) have moved and occupied part of the 30% space which is currently in use.
The parliamentary committee led by Vice Chair Mary Wamaua visited the facility to ascertain the status as part of oversight for regional development projects.
Wamaua challenged the LBDA management to enhance marketing for the property to boost occupancy and generate more revenue.
“This is a great facility that can be well utilized 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,” she said.
The drive, she said, must attract key government outlets like the Huduma Center so that more people can visit the facility and access other services offered within the expansive mall.