Kenya Railways takes on Swazuri over Sh17bn

The Kenya Railways Corporation (KRC) and the National Land Commission (NLC) are locked in a vicious battle over Sh17 billion meant for compensating land owners in the Nairobi-Naivasha Standard Gauge Railway project.

The corporation, which accuses the commission — chaired by Dr Muhammad Swazuri — of delaying the payments due to landowners on Phase 2A of the multi-billion-shilling SGR project, has now moved to court to compel NLC to pay.

The State corporation says in court documents that NLC had prepared all the compensation schedules, which comprised properties to be acquired within the sections of the corridor from Nairobi National Park to Ongata Rongai station and sections within Ongata Rongai, Ngong and Mai Mahiu station area.

Soon after, the Railway Development Levy Fund Advisory Committee approved the compensation schedule for the sum of Sh7,520,925,616.03, which NLC was expected to pay out. Further approvals were done and money released in the months of October last year to January this year.

“As a consequence of the foregoing, the Railway Development Levy Fund Advisory Committee approved disbursements of funds to the National Land Commission amounting to Sh10,224,478,162.46,” the corporation says.

“The National Treasury has so far released to the National Land Commission compensation funds for Phase 2A of the SGR Project amounting to Sh17,745,404,728.46 … it’s the legitimate expectation of all concerned and affected parties that NLC would release the compensation funds received from the National Treasury to the Projected Affected Persons (PAPs) promptly and without any unnecessary delays. Further, the said amounts were released after due diligence had been undertaken by several agencies and the same approved by the Kenya Railways and the Railway Development Levy Fund Advisory Committee.”

FRUSTRATION

Kenya Railways goes on to state that PAPs had the right to withhold their respective parcels of land until they have been paid land but, in the present case, Kenya Railways took possession of their parcels of land within the corridor for Phase 2 A of the SGR Project and construction work has been ongoing due to the strict timelines for the project.

“The construction work for Phase 2 A of the SGR Project has been suffering delays caused by frustrated PAPs who have not been compensated for their respective portions of land that has been acquired for the project.

Kenya Railways has written to NLC directly and made demands through its advocates seeking the release of the compensation funds due and payable to the PAPs and which sums have been received from the National Treasury but the NLC continues to withhold a substantial part of the sum and failed to respond appropriately, without any justification at all to the detriment of the Kenya Railways,” states Kenya Railways.

It adds that frustration on the ongoing construction work on Phase 2 A of the SGR Project is likely to occasion delays to the completion deadline of May 31, 2019 hence the urgency of this matter.

“There have been wrangles within the National Land Commission, which have necessitated filing of a suit at the High Court in Nairobi. However, such disputes should not interfere with the rights of the PAPs which are guaranteed by the Constitution or cause huge losses to the Kenya Railways arising from potential court cases or claims for damages due to the afore stated delays,” it stated.

Previously, the commission said the valuation was grossly exaggerated and needs to be reviewed and scaled down.

In November last year, NLC Vice-Chairperson Abigael Mbagaya placed a Gazette notice on behalf of the commission, effectively cancelling the initial valuation issued by NLC in March.

CLARIFICATIONS

In the new notice, Ms Mbagaya noted that the commission cancelled the Sh17 billion award as a result of discrepancies in computations, omissions and errors in areas that were to be acquired.

She also said there were changes in thre sizes of land acquired as a result of project realignment, resulting in some of the remaining portions of land being both uneconomical and inaccessible.

The commission further argued that some major developments were partially affected, creating the need to acquire them as a whole.

She also stated that other parcels of land were severely affected by the project by either splitting them into non-useful and uneconomical portions. NLC said there were overlapping of boundaries, welcoming those affected to seek clarifications.

The decision led to delays in payment despite the National Treasury having released the Sh17 billion compensation.

The suit by Kenya Railways does not mention the November 2, 2018 Gazette notice that called for re-valuation.

In a separate interview with Ms Mbagaya, she had stated that the commission had by Thursday last week already paid Sh12.2 billion after the evaluation was redone.

She said only a few owners with disputes, succession cases and court cases had not been compensated.

Ms Mbagaya told the Sunday Nation that individuals whose land was affected showed up at the commission and were satisfied with the new valuations. Mbagaya was non-committal on the amounts saved but a source not authorised to speak to the press said it is between Sh7-8.5 billion.

TWO-YEAR DELAY

“The government had issues with the valuation and we relooked it in consultation with all stakeholders which include Ministry of Lands, Ministry of Infrastructure and Kenya Railways. It was discovered there were gross exaggerations in some cases arising from the errors attributed to in the Gazette notice,” she said.

She said most of those affected have already agreed with the new awards. It is a stand KRC appears not to agree with, prompting the legal action. On December 31, 2018, acting Managing Director of Kenya Railways Philip Mainga expressed concern over the slow pace of compensation.

“Considering there has been a two-year delay in acquisition of the land, this is now causing further delays in implementing the project which, as you are aware, has a completion date of June 2019. The corporation is also concerned the wrangles and confusion at the commission are contributing to the delay in releasing of the funds. This is going to affect the project negatively,” noted Mr Mainga. He had noted that the Railway Development Levy Fund Advisory Committee had approved the money and the government had already released to NLC the first batch of Sh7.5 billion and Sh10 billion in the months of October and December respectively.

“Since the release of the said funds, the commission has not been disbursing the funds to the PAPs progressively and as agreed during our various conversations. This is therefore to request you to disburse the amounts to the PAPs without any further delay to enable us hand over the corridor to the contractor,” said Mr Mainga.

DEFRAUD

The letter was also copied to Head of Public Service Joseph Kinyua, Cabinet Secretary for Transport James Macharia, head of Presidential Delivery Unit Andrew Wakahiu, Principal Secretary for Transport Esther Koimmet and Ms Mbagaya. Sources indicated there has been a silent push by unnamed persons to have the original valuations reinstated, a move Ms Mbagaya could not confirm or deny.

This comes even as activist Okiyah Omtata last month challenged the November Gazette notice by the National Land Commission calling for review of the earlier valuation done by its officers. NLC said the court order did not affect compensation.

There have been turf wars between NLC Chairman Dr Swazuri and his deputy Ms Mbagaya, which have affected the running of the commission. Prof Swazuri is facing charges of conspiring to defraud the government of Sh221.3 million. Dr Swazuri is among seven people facing charges for approving KRC to buy its own land in an alleged fraudulent scheme. In his absence, Ms Mbagaya is the acting chairperson, a move Dr Swazuri is not comfortable with.