KeNHA splashes out Sh30b to compensate landowners

The Kenya National Highway Authority (KENHA) has acknowledged paying over Sh30 billion to land owners for compensation for their properties acquired for the construction of roads across the country without the requisite documents.

 The amount includes Sh16.4 billion paid to affected persons for road improvements that affected their land.

However, the transactions were not supported by relevant documents such as evidence remittances, identification, valuation reports and authenticated reports from local government administration offices.

In response, the authority has requested to be provided with the schedule with full particulars which includes Project Affected Persons commonly referred to as PAPs names, project names and land parcel numbers.

The auditor has also questioned the payment of Sh 6.5 billion for compensation for the diminution of profits and loss of business to traders who had erected their business on road reserves.

Auditor General Nancy Gathungu in her report for the year ending June 30, 2023, supporting documents including evaluation reports, names, and identification numbers of businesses were not provided for audit review.

The authority in their response agrees with the auditor that valuation reports were not shared for the compensations of the PAPs amounting to Sh 6.52 billion, due to the fact that the NLC did not share the reports while submitting compensation schedules.

“Based on your observation, we have written to the NLC requesting them copies of the valuation reports, copies of IDs and the nature of the business that was conducted by the respective PAPs will form part of the supporting documents for the valuation report,” the management wrote in the response.

Did not avail reports

The authority also concurs with the auditor that it did not avail reports for the sample of Sh4.9 billion paid to 125 PAPs since they did not receive them from the NLC.

A forensic audit by the OAG has since revealed how Sh24.86 billion in taxpayers’ funds were questionably spent on the regional Mombasa port access road project, an irregularity that puts Kenya National Highways Authority (KeNHA) and the National Land Commission (NLC) at the scene of crime.

The forensic audit for November 2023, currently before parliament, specifically raises questions how KeNHA disregarded feasibility reports as it went on to implement an alternative on the 41.7km project and therefore exceeded what would have been the cheapest alternative by over Sh5 billion.

The audit shows that NLC irregularly paid public funds for six parcels of land belonging to six state organs- KenGen, Kenya Revenue Authority (KRA), Kenya Power, National Housing Corporation (NHC), Kenya Railways Corporation (KRC), and Coast Water Works Development Agency.

 Gathungu says that a review of payments showed that payments totalling Sh 5.7 billion were made to 125 individuals but no supporting documents were provided including valuation reports, proof of ownership, acreage and approvals for payments.

“Based on your observation, we have written to the NLC requesting them for copies of the documents that were not availed,” states the management response.

The auditor has also queried the payment of Sh274.9 million in respect to Kirimukuyu/Mutathi Ini area, where she says that she could not confirm the payments as again requisite documents were not provided.

Board expenses

 Gathungu has also flagged off the huge increment of expenses by the Board of the authority which shot up by 75 percent from the previous year, from Sh41.2 million to Sh72.2 million.

 According to the auditor, last year the board held a total of 13 meetings which exceeded the recommended maximum of six meetings.

 The board expenditure includes ticket cancellation charges of Sh 133,400 which is a nugatory spending by the authority.

 “The expenditure includes ministerial and other activities totaling to Sh9.5 million that had no relation to the board activities and an item on field trips amounting to Sh 2.3 million which was not explained, “reads the report.

 In response, the management while acknowledging the ticket cancellation says it was incurred following the Kenyan airspace closure by the government as part of the Covid -19 pandemic containment measures.

Controversial Mau road

The auditor has also questioned the effectiveness and efficiency in the use of public resources of the controversy-ridden Mau Mau Road.

According to the auditor spur road works were at the initial stages and behind schedule despite the revised completion date of February 18, 2024.

 The report reveals that physical inspection on projects carried in July 2023 showed delayed works on various projects in different regions of the country.

Gathungu further notes that underfunding and under-expenditure affected the planned activities of the authority and have impacted negatively on service delivery to the public.

The auditor notes that lack of documentation on the involvement of the state department for roads before signing of the financial agreements, lack of documentation on identification and planning prior to commencement of the project, and lack of documentation on identification of donors.

The Dogo Kundu project was meant to improve transport of import and export goods and passenger traffic along the Northern corridor by decongesting the traffic to and from the port of Mombasa.

It entailed widening of the entire stretch of the road from a single 2-way roadway to 4 lanes, realignment of an existing 4 lane section of the road, interchanges, village through-roads and weighbridge equipment for two weighbridge facilities.