When the leadership of the Presbyterian Church of East Africa (PCEA) secured a Ksh. 650 million from the Kenya Commercial Bank (KCB) in 2010, the church hoped to expand its Milele Hotel, build housing units that they would sell to service the loan and even keep some profits for the church’s treasury.
None of them could foresee that transaction keeping the Church in a seemingly unserviceable debt.
Sixteen years later, the initial Ksh. 650 Million has ballooned to 1.3 Billion with the church hitting the headlines for financial impropriety.
The church has however dismissed the claims of mismanaging believers funds and explaining how the church got itself in debt.
PCEA secretary general Robert Waihenya has said the then leadership of the Church decided in 2010 to expand the Milele Hotel property and develop modern apartments to increase its revenue.
“They took a loan of Sh650 million and those apartments were to be sold off plan to enable the hotel establish itself better. And it was a good plan,” he said.
They church intended to build 85 apartments each expected to cost between Sh20 million and Sh25 million.
The plan, Waihenya explains, was disrupted by a series of terror attacks at the Coast that greatly impacted tourism.
“So when terrorism happened, there was not enough funds. Those saying money was spent badly, I wasn’t there at that time. I was in school.” He has said.
“By that time, the hotel was operating just 10 rooms out of about 80 rooms. So the hotel was not self-sustaining.” He has added
When the terror attacks were contained, the church was hit by another pandemic- Covid 19.
A committee was formed to assess the viability of the hotel considering the new challenges. Waihenya said an audit found that the business was still viable.
The committee recommended that buyers who had pledged to purchase the housing units complete their payments.
The money combined with contributions by church members would then be used to finish two apartment blocks, sell the units and use the proceeds to repay the loan.
Waihenya said the church managed to raise Sh125 million of the Sh130 million required to complete the project.
“But we didn’t build, we started huggling over what we should do. Eventually we took the money to the bank, and it said since we had shown commitment and seriousness to pay off the debt, we should be paying Sh5 million instead of the Sh13 million monthly deposit.”
Meanwhile people who had initially bought units in the preconstruction stage had gone to court and were awarded damages for forfeited profits that they would have made had the project been completed in time.
The court awards together with increased loans interest saw the cumulative sum associated with the Milele Hotel project hit the billion mark.
The church has now paid over 900 million shillings and is appealing to the public to help it raise over 700 million to save Milele Hotel.
