Kisumu county sets stage for tussling over state hotels

Fight for ownership of government-owned hotels has heated up with Kisumu county and tourism finance corporation fighting over its ownership.

TFC says the hotel is owned by Sunset hotel limited a private company and that a notice by Kisumu County seeking to redevelop the hotel is not sanctioned.

The state corporation said the company was incorporated in 1976 with TFC shareholding at 95.42 percent while the county only held 4.58 percent.

“The county government of Kisumu, therefore, lacks the legal mandate to undertake the public-private partnership respecting Sunset hotel,” TFC said.

The row has been sparked by the move by the Privatization Commission to seek a transaction advisor to help the state sell Hilton and Intercontinental hotels.

“The Commission requires Transaction Advisory services to update due diligence reports (industry overview, financial, operational and legal due diligence work conducted in 2010 and 2014) in respect of International Hotels Kenya Limited (Hilton Nairobi), Kenya Hotels Properties Limited (the Intercontinental Nairobi) and Mountain Lodge Limited,” the Privatisation body said..

Since 2008 when the government adopted a report that proposes the privatization of state-owned companies and parastatals, the commission has been able to sell off five public sugar companies, three hotels owned by Kenya Tourist Development and Kenya Wine Agencies.

The hotels that are targeted include Intercontinental (International Hotels Kenya Limited), Hilton Hotel (Kenya Hotel Properties Limited) and Mountain Lodge.

Golf Hotel in Kakamega, Sunset Hotel in Kisumu, Kabarnet Hotel, Mount Elgon Lodge, Mountain Lodge, The Ark Limited and the Kenya Safari Lodges and Hotels Limited were also to be considered for privatization.

The Corporation currently has a shareholding in mature equity investments that includes;

(i)            Kenya Safari Lodges and Hotels (KSLH) – 82.45%

(ii)           Sunset Hotel – Kisumu – 95.42%

(iii)          Golf Hotel – Kakamega – 80%

(iv)         Kabarnet Hotel, Mt. Elgon Lodge – 72.91%

(v)          Hilton Hotel – 40.58%

(vi)         Kenya Hotel Properties Limited (KHP) – 33.83%

(vii)        Buffalo Springs Lodge – 42%

(viii)       Maralal Safari Lodge – 9.5% and

(ix)         The Ark – 5.64%

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