Lifestyle Heights allegedly owing Tatu City company Sh17 million in service charge and utility bills

A dispute pitting Tatu City management and property developer Lifestyle Heights has intensified with the latter calling on the government to revoke the former’s Special Economic Zone license.

The investor also called for a public inquiry to be instituted to probe “the questionable conduct of Tatu City’s foreign owners” insisting they will not be deterred from carrying out their projects.

Last week, residents of the 5,000-acre complex alleged discrimination, delays in approval of houses and exorbitant power supply rates by the management of Tatu City which enjoys a special Economic Zone (SEZ) status.

Addressing journalists, owners of Lifestyle Heights, a residential estate within the multi-billion property, accused the company of frustrating their clients and developers.

Peter Karoki, Managing Director Home Bridge Limited who are the developers of Lifestyle Heights housing project and the first local investor at Tatu City is reading malice at what he termed as discriminatory treatment of some investors.

“We have applied to build an additional 652 homes to the existing 320, but the Tatu management has refused to approve them, yet when American and European companies apply to build a single warehouse their building plans are fast-tracked. Now 60 years after independence there seems to be a new colonial enclave in Kenya by name of Tatu City,” Karoki said in his statement.

But in a rejoinder issued through an email, Tatu Company dismissed the allegations as false and termed Karoki as a “rogue developer” who has contravened contracts and was allegedly owing the company Sh17 million in service charge and utility bills.

Tatu City further claims that Karoki has repeatedly violated development controls and “illegally added a floor to one of the buildings in contravention to contractual obligations.”

“He tries to distract people from Lifestyle Heights problems by attacking Tatu City,” the rejoinder read.

However, Karoki accompanied by senior managers led by Rawlings Omwansa dismissed the allegations by Tatu City as malicious and baseless, adding that they have tried diplomacy to resolve the issues in vain.

When the Kenya government set up Special Economic Zones, under SEZ Act, No. 16 of 2015, Karoki said, the intention was not to set-up “colonial enclaves”.

“The purpose was to incentivize investment and to create an environment where businesses would thrive without government red tape, less taxes, less human resource laws, and less operational levies.

“But the opposite is true in Tatu City whose management has made a mockery of the same SEZ laws. Local investors have been forced into agreements that are inconsistent with the spirit and laws that establish SEZs,” he went on.

The MD claimed that Tatu City buys power at Sh7.80 per hour kilowatt, but sells the same to residents at Sh12.60 per hour Kilowatt “yet we are in a special economic zone, where all amenities should be cheaper.”

“The story of water is very heart-breaking. During Covid-19, we discovered, Tatu’s water quality had been compromised and so we took water samples to the lab and indeed we found that it was contaminated. When we raised the issue with Tatu City, instead of rectifying, they cut off water supply,” read the statement by Lifestyle Heights.

Besides, Karoki claims that Tatu is the only foreign investor that invokes international tribunal mechanisms over cases pending in local courts.

“In contracts with local investors, Tatu inserts clauses that bind local investors to international arbitration mechanisms,” the statement reads.

It alleges that in some of the disputes, Tatu City proceeded to the London Court of International Arbitration (LCIA) while parallel cases were in play in local courts.

“We therefore ask why should a foreign investor who has sworn to abide by Kenyan laws go ahead and institute parallel proceedings in international jurisdictions? Is that not contempt for Kenya’s laws and Kenya’s legal jurisprudence?” he posed.

“For the reasons above and others we call on President William Ruto to revoke Tatu City’s SEZ license until all cases in court and in arbitration are resolved.”

Omwansa said Lifestyle Heights has held numerous meetings with Tatu City management in a bid to come to an agreement but this has borne no fruit.