Sunday, October 22, 2017

Court rules in favour of multi-million Dollar Kenyan data centre

Judge finds misunderstanding has caused a two-year delay and blames government that “should have dug deeper”.

A Kenyan court has ruled in favour of the construction of a $33.8m data centre in the country’s second largest city, Mombasa.

The ruling by judge Justice Eric Ogola compels the Kenyan government to grant East Africa Capital Partners (EACP), a venture capital fund manager firm, approval for the data centre development.

The project is to be built for TV and internet services provider Zuku, part of the Wananchi Group, of which the EACP is a shareholder.

Ogola’s ruling has determined that the Mombasa County government should approve the data centre and consequent construction plans originally submitted by EACP.

According to Business Daily Africa, the data centre project was submitted for consideration by EACP which afterwards passed on the matter to its data centre operator and subsidiary company Kooba Kenya, which would later be incorporated in 2015.

The transfer of the project to Kooba raised concerns amongst the Mombasa County governors, who on top of raising concerns around security and traffic congestion in the area the building will sit, said that Kooba’s name was not written in the proposed plans by EACP and therefore no construction consent should have been given.

The government labelled Kooba as a “stranger” in the process.

Kooba’s CEO Richard Bell was quick to react at the time saying that the Mombasa County concerns were vague and the delay caused by bureaucracy could cost investors a projected return of $16.4m.

More than two years down the line, judge Ogola has ruled that the Mombasa County “should have dug deeper” to find out why Kooba would be included in the plans, being a data centre services provided owned by Zuku parent company Wananchi Group’s shareholder EACP.