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Auditor: Probe SGR land compensation billions

By Mercy Mwai
Wednesday, September 16th, 2020
SGR train at Mombasa terminus. Photo/Courtesy
In summary
    • “DCI and EACC should conduct further probe to establish criminality on payments made to Project Affected Persons along Embakasi Station Railway Reserve whose titles had been revoked by NLC Committee on Review of Grants.”

Mercy Mwai @wangumarci

Auditor General Nancy Gathungu has called on the Directorate of Criminal Investigations (DCI) and Ethics and Anti-Corruption Commission (EACC) to investigate National Land Commission for compensation of land on which the Standard Gauge Railway (SGR) was constructed.

NLC paid out billions of shillings as compensation for the compulsory acquisition of the Sh327 billion Mombasa- Nairobi SGR. 

In a special audit report, Gathungu raises concerns that Kenya Railways Corporation (KRC) that paid the compensation on behalf of NLC and other public entities failed to ensure proper conceptualisation, planning and designing of projects before committing public funds on acquisition of land.

According to the report, the total approved development budget of land compensation in regards to the SGR was Sh29 billion disbursed in the financial years 2014/2015, 2015/2016 and 2016/2017.

Audit raises concerns that KRC was still in the process of establishing the actual sizes and location of all land acquired for the SGR project.

During the three financial  years, KRC on behalf of SGR, acquired parcels of land and developments located in Makueni, Nairobi, Mombasa, Kwale and Kilifi counties respectively.

“There was no documentary evidence available that an independent search was carried out prior to recommending compensations for compulsory acquisition of the parcels of land acquired for construction of the SGR line,” the report.

With regards to ownership and lawful occupation of parcels of land acquired, the report noted that NLC did not confirm ownership and lawful occupation in regard to the two years’   prescription

Raises concern

Section 107 (8) of the Lands Act, 2012, further provides that all land to be compulsorily acquired shall be geo-referenced and authenticated  by the office or authority responsible for survey at both the national and county government.

With respect to Makueni County,  Gathungu wonders why after physical verification exercises conducted at Emali and  Sultan Hamud, KRC initially acquired land of 12.98 hectares for construction of a station at Sultan Hamud, but later redesigned the SGR route  resulting in relocation of the station from Sultan Hamud to Emali without any  explanation.

She says that as a resukt of the anomaly, land and development valued at Sh749.5 million acquired at Sultan Hamud for construction  of the station remain unutilised  despite government funds having  been incurred in its  acquisition.

“Under the circumstances, there was a risk that the Government may not realise value for money from this expenditure,” the report says.

At the Embakasi Railway Station in Nairobi, the audit raises concerns that public funds amounting to 221.4 million incurred for compensation along the reserve was not used in a lawful and effective manner. 

NLC on December 15, 2016, vide cheque No.435, paid 221.4 million out of its National Bank of Kenya (NBK) Account No. 0100103298000 for four properties that were said to be situated along the reserves.

The special audit, however, established that the titles for the four pieces of land had been revoked by the NLC Committee on Review of Grants and dispositions at its meeting held on  October 7, 2016 implying that the said land was to be considered public land. 

However, four days later on October 11, 2016, NLC Chairman wrote to former KRC MD Atanus Maina informing him that following an appeal for verification of plots within the SGR corridor Land the Commission had reconsidered its decision and found that the titles to the properties be upheld.

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