NSSF fights for Hazina Plaza building in Mombasa

A picture of NSSF Headquarter in Nairobi; Fund is locked up in legal battle with tenants in Mombasa (PHOTO: FILE)

NAIROBI, KENYA: A legal battle is brewing over the National Social Security's (NSSF) plan to repossess the imposing Hazina Plaza at the heart of Mombasa island from a private firm it leased it to four years ago. 

On Sunday, the tenants in the 13-storey building accused the Fund of attempting to forcefully evict them before they recover millions of shillings they spent to renovate the building.

The traders said they spent over Sh150million to renovate the then dilapidated 13-storey building and have set up business worth 500 million in the building.

“It is unfair for NSSF to evict us after we have spent alot of money to renovate this building which was just in ruins,” said Dakane Sheikh Mohamed, one of the traders.

He said tenants were sub-leased by M/s Techno Holdings ltd, a firm owned by a senior military officer, which leased the building in 2014 for a period of 10 years. NSSF and Techno Holdings have differed over the rent payable.

The tenants said they have obtained a temporary court order to stop the eviction as they prepare to file a substantive suit against the Fund and Techno Holdings Ltd.

"Auctioneers from Dikemwa have visited our business two times with an aim to evict us despite the fact that there is a court order barring NSSF from effecting the eviction order," said Mohamed.

He said the tenants have paid the rents to Tecno Holdings up to June 2, 2018 and are surprised with NSSF decision to throw them out of the building.

The move could complicate NSSF plan to turn around the plaza into a profitable venture after a recent Auditor-General report indicated that the Fund has not realised value from Hazina Plaza Mombasa which it bought in 1994 at the cost of Sh450 million.

“In total our business is worth Sh 0.5 billion. We spent over Sh130 million to renovate the building. If NSSF evicts us then we will suffer huge losses,” Mohamed lamented.

He said the facelift work of the plaza “which was a ghost building for 24 years” was financed by eight sub-lease tenants and not the Techno Holdings or NSSF.

The bone of contention is the clause on rent Techno Holdings should pay the Fund. NSSF insist the lessee should pay Sh2.2 million per month. Techno insists its Sh1.1 million.

“According to us we are supposed to pay Sh27million for two years but the Fund insists the amount is per year,” said Techno Holdings Director captain (rtd) Omar Abdille.

NSSF Public Relations and Communication Manager Christopher Khisa defended the planned eviction saying M/s Techno had flouted the lease agreement by failing to pay the rent as required.

“The lease agreement gave Techno Holdings Limited a grace period to renovate the house before it starts to pay rent. Since January 1, 2017 it has not paid the rent,” said Khisa in an interview.

He said NSSF had no lease agreement with the current tenants and that the Fund was keen to repossess the building and turn it into a profitable venture for the workers.

Omar Abdille however refuted the charge and produced bank deposit slips as proof that he has paid NSSF close to Sh.6.5 million rent since October last year.

He also said he has instructed his lawyers to move to court to stop the eviction saying the matter should be referred to the rent tribunal for interpretation.

“The problem is the interpretation of the clause in the lease agreement. This can easily be resolved through a rent tribunal. It is not true that I have never paid rent,” said Abdille.

He said he will also move to court to stop NSSF and admitted that he was aware that the sub-lease tenants also plan to file a suit against his firm and NSSF.

Mr. Evans Momanyi, a Program Officer at Kuza Africa, a civil society group championing the rights of traders in Mombasa said NSSF should engage the traders instead of evicting them.

“NSSF should know that hundreds of employees employed by these traders also contribute to the Fund and would lose jobs if the eviction goes on,” said Momanyi.

According to documents seen by this writer indicate that NSSF leased the building to Techno Holdings lts on April 29, 2014, for a period of ten years from August 1, 2010 to July 30, 2020.

On January 27, 2016, the NSSF board however granted the lessee a two-year grace period starting May 2, 2014 when it formally got vacant possession.

The 13-storey complex, include two basement floors and mezzanine, formally housed the iconic four –star hotel, Polana Hotel. It now houses car showrooms, hotels, a supermarket and Turkish furniture shop.

The tenants say they have been paying rent to Techno Holdings but it was not clear whether the latter submitted the said payment to NSFF.