The Bomas of Kenya, which is presently under reconstruction, will host a shopping mall and three high-end hotels under lengthy lease terms, new disclosures showed —marking a major shift away from its role as a cultural showcase centre.
The State agency said that private investors would design, finance, build, and operate the facilities under lease terms of at least 40 years.
“These developments are part of a long-term development programme for the modernisation,” Bomas of Kenya said in a call for bidders to set up a shopping mall and two five-star and one two-star hotels within the expansive 79-acre complex on the outskirts of Lang'ata in Nairobi.
The lengthy Build-Operate-Transfer (BoT) terms offered by Bomas are eye-catching. A review of key BoT projects globally shows that concessions are typically for a period of 25 to 30 years – which is considered sufficient time for investors to fully recoup their major initial investments.
“Lease payments are to be paid for five years in advance at the beginning of each five-year period. The annual lease payments shall be increased by 10 percent once every five years,” Bomas said.
Under BoT contracts, private investors finance and build projects and operate them for a period to earn a profit before eventually transferring ownership to the government.
Bomas of Kenya said that each of the hotels will occupy three acres of land, while the shopping mall will occupy a nine-acre plot and would form part of the Bomas International Convention Centre (BICC), which is set to cost over Sh30 billion.
“It is envisioned that the developments should create and support new demand for Bomas of Kenya facilities, promote larger events in adjacent areas of Bomas of Kenya, and possibly spur additional development in the area,” the State agency said.
“The eventual development and design of the hotel should allow for maximum flexibility to respond to changes in community and market needs over the coming decades,” it added.
The Defence ministry is currently developing a section of the BICC. Although the Cabinet approved the development in August 2023, construction did not begin until April, following a series of legal battles.
In January, the Public Procurement Administrative Review Board (PPARB) directed the Ministry of Defence to proceed with the development of the facility, which had stalled over claims of lack of funds and change of scope of works.
The tender had been awarded to a Turkish firm, Summa Turizm Yatimciligi Anonim Sirketi, at a cost of Sh31.6 billion. However, the ministry had terminated it 329 days after the award, triggering PPARB’s intervention.
