Sh168m dream hotel that never was

Developer is accused of carrying out substandard work on four-storey building in Nairobi.

A part of a hotel building whose construction is said to be of poor quality near Gateway Mall in Nairobi. PHOTO | STEVE JUMA | NATION MEDIA GROUP 

In Summary

• Mary Mwangi of Express Connections company alleges that Easy Properties company, associated with businessman Stephen Onyambu, pocketed at least Sh168 million but constructed a substandard building.
• Easy Properties is said to have entered into a deal with Mrs Mwangi through Express Connections in October 2012 to build a four-storey hotel with 80 rooms to serve travellers using Jomo Kenyatta International Airport.

By ELVIS ONDIEKI
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Prominent city matatu businesswoman Mary Mwangi of Express Connections company is locked in a row with a property developer over the construction of a building in Nairobi.

Mrs Mwangi alleges that Easy Properties company, associated with businessman Stephen Onyambu, had pocketed at least Sh168 million but constructed a substandard building.

Easy Properties is said to have entered into a deal with Mrs Mwangi through Express Connections in October, 2012 to build a four-storey hotel with 80 rooms to serve travellers using Jomo Kenyatta International Airport.

Express Connections owns the Double M fleet of buses that operate in Nairobi.

Mrs Mwangi says she tasked Easy Properties with constructing the hotel near Gateway Mall on Mombasa Road from the agreement date until August, 2013.

However, according to a complaint currently before the Chartered Institute of Arbitrators, the structure that Easy Properties built has cracks on its pillars and walls, has no beams on its stair-case slabs, is riddled with crooked columns, has varying plaster thickness, among other defects.

“Due to major cracks… professionals, after conducting an inspection, concluded that the building was not structurally sound and it should not be occupied as it is hazardous,” the complaint reads.

Almost three years since the building was “completed”, it remains uninhabited while hotel fittings and catering items worth Sh40 million are lying idle, according to Mrs Mwangi.

Mrs Mwangi’s hopes of recovering her money lie in the arbitration process, which – by signing the first agreement with Easy Properties – she committed to use in case a dispute arose over the deal.

In her plea to the arbitrators, signed on March 19, 2015, she seeks a declaration that Easy Properties breached the agreement.

Should the construction company fail to comply with the agreement details, she pleads, it should “refund the full purchase price and all costs incurred in putting up the building”.

By May this year, the arbitration documents show, she was claiming Sh268,092,357 from the contractor. In her claim, Mrs Mwangi lists a number of faults on the structure: “The building is such that when it rains, water flows into all the walkways and some of the rooms, as well as into the lift area. The gutters collect rain water and direct it all to the parking area, which consequently floods and becomes impossible to walk or park vehicles”.

“The building is full of cement strips and unevenness all over the points where cracks had appeared ... which makes it aesthetically unpleasant,” she says.

Mary Mwangi, the director of Express Connections, at an interview at her office along Kangundo Road in Nairobi on August 18, 2016. PHOTO | ELVIS ONDIEKI | NATION MEDIA GROUP

Because of the building’s instability, the professionals’ report says that not even lifts can be installed in it. Mrs Mwangi says that the bulk of the money used to finance the construction was a bank loan.

Mrs Mwangi, widowed since 2011, vied for the Embakasi East parliamentary seat in the 2013 General Election where she garnered 33,027 votes, losing to current MP John Omondi who got 36,781.

The incorporation certificate for the planned hotel shows that the business had been named Sir John Express Suites, which is in honour of her deceased husband John Mwangi.

The biggest loan that Mrs Mwangi’s firm secured in the deal was Sh120 million that one bank is said to have wired to Easy Properties’ bank account on January 17, 2014. The construction company, however, denies engaging in substandard work, challenging the accuracy of a report by an engineer that Mrs Mwangi hired to assess the building.

Through Liko and Anam Advocates, Easy Properties says there are no faults in the building and urges the tribunal to dismiss the case as Mrs Mwangi’s firm was not ready for negotiations and was acting in bad faith.

The company says that most of the defects in the building are as a result of the work by the person hired to test the building.

The fact that two financial institutions helped Mrs Mwangi finance the project, they argue, is proof that works were above par.

“Such financial accommodation would not be available if the building was not sound,” the firm says.

Easy Properties claims that Mrs Mwangi’s firm in fact occupied the structure for some time and started “removing some of its property from the building in a bid to further feign a dispute and claim … that it has never taken possession and that it is suffering loss and damage.”

“The claim to the effect that the repairs that were to be carried out when Express Connections took possession are still ongoing and that the current repairs are aimed at concealing poor workmanship or defects is denied,” they state.

The dispute before the tribunal took a dramatic turn two weeks ago when Mr Kihara Muruthi, the chairman of the Chartered Institute of Arbitrators who has been hearing the dispute since it was first filed, pulled out of the case.

Mr Muruthi ruled on August 5 that Mr Paul Ngotho, the lawyer Mrs Mwangi had appointed to represent her in the matter after changing advocates, is a man he interacts with at the committee of the Chartered Institute of Arbitrators.

“I have represented him in the past in legal proceedings before the civil courts … I would not want Easy Properties to feel that it has been denied justice due to this relationship,” he said.

The dispute has so far been characterised by parties changing lawyers and new claims arising, among other intrigues.