The Kisumu County Government and Kisumu City Board are facing a staggering KSh7.203 billion liability following a High Court ruling in favor of Spacebuster Limited. The dispute originated from a contract signed on December 2, 2020, where Spacebuster was to design, install, and manage 6,000 tuck shops in Kisumu for 10 years. Each tuck shop was expected to generate KSh10,000 in monthly rent, with the county receiving KSh500 and Spacebuster retaining KSh9,500.
The contract's terms would eventually lead to significant financial losses for the county. Justice M.S. Shariff awarded Spacebuster KSh363.33 million in direct expenditure and losses, and another KSh6.84 billion in projected income, totaling KSh7.20333 billion before interest and legal costs. The county's defense strategy, or lack thereof, has been questioned, as they chose not to participate in the proceedings after losing their adjournment and recusal applications.
A key aspect of the case involves allegations against Michael Abala Wanga, the then Acting City Manager. Spacebuster's managing director, Babior Newton Ong'ende, testified that Wanga demanded KSh10 million in bribes before allowing the installation of tuck shops in designated areas. This accusation was not rebutted in court due to the county's decision not to cross-examine the witness or present contrary evidence.
The county has since disputed the bribery allegation, with Wanga describing it as malicious and defamatory. In a petition filed on October 2, 2026, Wanga challenged the handling of the case and announced the county's intention to appeal and seek a stay of execution. The distinction between the civil case ruling and a potential criminal conviction for bribery is crucial.
Spacebuster claimed it had invested heavily in the project, including purchasing 465 containers at KSh520,000 each and incurring storage, transportation, and fabrication expenses. The court accepted direct expenditure and losses totaling KSh363.33 million. However, the bulk of the judgment came from the contract's compensation provisions, which provided for payment of income the service provider would have earned during the remaining contract period.
The county has offered an alternative explanation for stopping the project, citing issues with the containers' locations, including installation in drainage areas and walkways. Wanga has maintained that the project was suspended due to problems and misrepresentations surrounding the contract. However, these arguments were not tested against Spacebuster's case in court due to the county's decision not to participate in the proceedings.
The county is now moving to fight the judgment, with Wanga announcing an appeal and an intention to seek a stay of execution. He has also petitioned Chief Justice Martha Koome and the Judicial Service Commission over the handling of the proceedings. The outcome of this case will have significant implications for Kisumu County and its taxpayers.
Key points
- The Kisumu County Government and Kisumu City Board face a KSh7.2 billion liability due to a court ruling in favor of Spacebuster Limited.
- The county's defense strategy, including not participating in the proceedings, has been questioned.
- The case involves allegations of bribery against Michael Abala Wanga, which the county has disputed.
