Silent transfer of Bomas shares to Treasury raises eyebrows

The secrecy surrounding the status of the Bomas of Kenya has taken a new turn after the National Treasury quietly assumed ownership of the cultural centre.

The facility was previously 100 per cent owned by the Kenya Development Corporation (KDC).

Search by The Sunday Standard reveals that shareholding has now changed with Treasury owning 99.99 per cent while the Ministry of Culture and Heritage has a 0.01 per cent stake.

This has further raised more questions on the goings on at Bomas, where the government has in recent months embarked on an upgrade that is shrouded in mystery.

Earlier, former Deputy President Rigathi Gachagua, claiming insider knowledge from when he was in government, expressed concerns that Bomas could have been sold to a Turkish national.

The latest revelations on ownership now adds to the mystery surrounding the cultural center.

Last week, MPs demanded full disclosure on the ongoing Sh31.6 billion renovation project.

The Public Investments Committee on Social Services, Administration and Agriculture (PIC-SSAA) issued the directive, following revelations that the Kenya Defence Forces (KDF) is carrying out the facelift.

The government envisions a major tourism facility when announcing the establishment of Bomas International Convention Centre (BICC).

It said the facility would be an ultra-modern convention that will feature a Conference Centre, a Presidential Pavilion and at least five hotels.

According to the Ministry, BICC will have multiple facilities that include an 11,000-capacity convention centre, sports and recreation area, animal orphanage, hotel and cultural facilities.

“When complete, BICC will raise Kenya’s conferencing, recreational, cultural and wildlife tourism profile, contributing to wealth and employment creation in line with the Government’s Bottom-Up Transformation Agenda (Beta) plan,” said the Defence Ministry in a statement on its site.

Treasury’s takeover is the latest in a series of secretive deals at Bomas, which include the refurbishment that is being undertaken by the Ministry of Defence alongside the Turkish firm Summa Turizm Yatirimciligi Anomin Sirket. 

The government has not been forthcoming on why the Defence Force took charge of the renovation from the Ministry of Culture and Heritage.

Also, despite showing capability to undertake infrastructure works when it refurbished the metre gauge railway, the Kenya Defence Forces have only been keeping watch at the facility as the Turkish firm goes on with the reconstruction works.

There is also no clear information on the nature of works, which have interchangeably been referred to as renovation and upgrade by government officials, who are however not clear on what Kenyans will see once the works are complete.

And the tendering of the facility has also been a mystery.

The tender award to Summa was to “design, build and equip the Bomas International Convention Complex (BICC)”, with the details of the tender being confidential.

While the government has insisted that the renovation is taxpayer-funded, court papers also indicate that the Turkish firm had secured 80 per cent of the funds needed.

This was after the Defence Ministry claimed it did not have adequate funds for the project and went ahead to cancel the tender to Summa. This was however, overturned by the court.

MPs have queried how the Defence Forces were onboarded as well as the demarcation of roles between KDF and the Turkish firm Summa.

The genesis of the project goes back to November 2023 when the Ministry of Defence awarded the tender to the Turkish firm to design, build and equip the Bomas International Convention Complex (BICC). 

The Ministry earlier received approval from the Public Procurement Regulatory Authority to procure a contractor on behalf of the State Department of Culture and Heritage to undertake the renovation. 

The Ministry of Defence single-sourced Summa Turizm Yatimciligi Anonim Sirketi, inviting the firm to submit its bid in response to a direct tender.

In November 2023, Summa was awarded the contract after meeting all the requirements and being deemed qualified to undertake the works.

The firm in its tender documents had quoted $245.51 million (Sh31.9 billion), which was later reduced to $245 million (Sh31.85 billion), on the recommendation of the Defence Ministry’s principal supply chain management officer.

In competitive bidding, the tender is usually awarded to the lowest bidder.

Summa was notified of the award on November 22, 2023 but for close to a year, it had not signed a contract with the Defence Ministry and on October 16, 2024, the Ministry notified the firm that the tender had been terminated.

At the time, the Ministry told the firm that the award was being “terminated due to a significant change in scope of works as well as the applicable funding model.”

Summa would try talks with both the Defence Ministry and the Culture and Heritage Ministry, urging them to reconsider the tender cancellation and go on with the project.

In fact, earlier in December 2023, just two months after it was awarded the tender and it was evident that the government was reconsidering the award, Summa officials paid a courtesy call to Defence Ministry officials.

According to court papers, Summa had said it would assist in sourcing 80 per cent of the financing requirement. 

In November 2024, shortly after the Defence Ministry cancelled the tender in October 2024, Summa wrote to the Ministry, saying that it found financiers who could provide funds to plug in where the government was short.

“We have engaged with reputable international financial institutions to arrange financing for the successful implementation of this prestigious project. We are pleased to inform you that we are able to secure financing of up to 80 per cent of the contract amount upon confirmation from the Ministry of Defence,” said Envar Sayan, chief executive Summa Construction in a November 6, 2024 letter to the PSs Defence and Gender.

Both the courtesy call in late 2023 and offer to bring on board financiers in 2024 appear not to have worked and now the Summa feared it would lose the contract.

This prompted the company to move to the Public Procurement Administrative Review Board (PPARB) on December 2 last year seeking to overturn the tender cancellation by the Defence Ministry. 

On December 23, 2024 PPARB ruled in the firm’s favour and directed the Defence Ministry to sign a contract with Summa within 90 days. Summa is currently undertaking the works supervised by the Defence Forces.

And just as the tendering mystery, Bomas of Kenya, which has for more than five decades been open to Kenyans and foreigners, has been sealed off, as earthmovers tear down the iconic auditorium.

The facility that showcased Kenyan dances has also severally served as the national tallying centre during elections and was also the venue of charged meetings on drafting a new constitution in the 2000s that birthed the famous Bomas Draft.

Also gone are the traditional huts that depicted how the homesteads of the different communities looked in years gone.

And now, Treasury’s secretly taking over the shareholding of Bomas from KDC points to the opaqueness in the delivery of the reconstruction project that could otherwise be a game changer for the country’s tourism sector, particularly the conferencing. 

A source told the Saturday Standard that there are no records of a board meeting okaying the transfer of shares from KDC to Treasury.

Documents from the Business Registration Service (BRS) show that Treasury owns all but a few shares in Bomas, holding 253,900 shares of the 254,000 shares – translating to a stake of more than 99.9 per cent.

The balance of 100 ordinary shares is held by the State Department of Culture under the Ministry of Gender, Culture, the Arts and Heritage. 

Until recently, Bomas was wholly owned by the Kenya Development Corporation (KDC), which in its annual report for the year to June 2023 lists Bomas as among the about 17 firms that it has a shareholding, some of which are jointly owned with private sector players.

In the case of Bomas, KDC said it has a 100 per cent stake. 

Before then, Bomas was owned by Tourism Finance Corporation (TFC), the predecessor to the Kenya Tourist Development Corporation.

In 2021, TFC, alongside Industrial and Commercial Development Corporation (ICDC) and IDB Capital, were merged to form KDC – a state owned development finance institution – which took over their assets including Bomas of Kenya.

MPs have expressed concerns at how renovation was being undertaken, also saying they are in the dark and that little information has been flowing to Parliament.

This is despite the key role that they play in approving allocations for such work during the budget making process.

National Assembly’s Public Investments Committee on Social Services, Administration and Agriculture directed the management of Bomas of Kenya to provide it with full disclosure on the renovation project.

“It might be a worthy initiative but without clear records, we cannot support it,” said Committee chair Emmanuel Wangwe (Navakholo MP). 

The committee also tasked the Office of the Auditor General to keep tabs on the renovation works and include its findings in next year’s audit report on Bomas. 

The Committee had summoned Bomas of Kenya Chief Executive Nixon Serede to offer clarity on the renovations.

The CEO told the MPs that the renovations are funded by the National Treasury, adding the exercise was on account of recommendations by the Tourism Research Institute.

TRI had, following a survey of Bomas, highlighted the need for an upgrade to match similar facilities in Rwanda and South Africa. 

The renovations are expected to be completed by June next year.

During the sitting, the lawmakers expressed concern, even suggesting that the facility had been ‘mortgaged’ and placed under foreign control.

The search for financiers by Summa has further raised questions to the extent of the Turkish firm’s involvement in the project beyond being the contractor.