City Hall risks losing up to Sh300 million after the government revoked a title deed for a prime property it sold to a private developer.
The council has written to the Ministry of Local Government proposing an out of court settlement with the private developer to resolve the matter.
City Hall’s fears arise from the move by Lands minister James Orengo to revoke the title deed issued to the private developer for a prime plot where the Highridge Health Centre, which was demolished last week, stood.
Speaking at the site of the demolition on Wednesday, Mr Orengo said that under the law, the land can only be used to provide health services to residents and no one is allowed to occupy it.
“The title here said that the land and buildings shall only be used for the purpose of a clinic and no person shall reside on the land,” he said.
But in a sudden turn of events, City Hall has written to the Local Government ministry warning that the revocation of the title deed could cost the council millions of shillings should the developer move to court.
In the letter to Local Government permanent secretary Karega Mutahi and copied to Deputy Prime Minister Musalia Mudavadi and town clerk Philip Kisia, City Hall’s acting director of legal affairs Aduma Owuor advises that the council consider an out of court settlement with developer Garun Investments Ltd to avert a costly legal process.
“The council has commenced investigations to get to the root cause for a solution with the applicants who purchased the property free of encumbrance and caused it to be transferred on April 20, 2010, thereby acquiring a legitimate title,” Mr Owuor says in the letter.
Mr Orengo had argued that the land was neither to be sold nor subdivided. He said City Hall, from whom Garun Investments bought the property, had no authority to dispose of it.
On his part, Mr Mudavadi instructed City Hall not to approve building plans by anyone who wants to build on the controversial piece of land.