Investor falls out with devolved unit over Sh17bn disputed land rates

Saturday November 17 2018

Tata Chemicals Ltd dredging machine harvests soda ash from Lake Magadi. The investor has fallen out with Kajiado County government over disputed land rates running into billions of shillings. PHOTO | FILE | NATION MEDIA GROUP


A Lake Magadi investor has fallen out with Kajiado County government over disputed land rates running into billions of shillings.

Tata Chemicals Ltd, formerly Magadi Soda, which extracts thousands of tonnes of soda ash from the lake in Kajiado West Sub County, owes the county Sh17 billion for their 224, 991 acres for the last six years.

According to the county's current Finance Act, an acre of land is charged land rates Sh14,000 a year per acre.

The defaulted bill is being calculated from 2013, when devolution set in.

The county government has insisted on the investor paying the full amount or else it faces auction, while Tata Chemicals clings to a "gentleman's agreement" three years ago with the former County Government on reducing the rate from Sh14,000 to Sh120 per acre.



The secret agreement which is in form of minutes, would mean Tata Chemicals pays Sh27 million per year, and not Sh3.1 billion.

Tata Chemicals has always said the nature of the land they do business on is unique and it would not be tenable to charge them at theSh14,000 rate per acre annually like an ordinary land owner.

Mr Titus Naikuni, who remains the face of local interests in the company where he serves as vice chairman and a shareholder, has contested the county government's claim of land rates saying they had "already struck a deal" with the former county government to reduce these arrears to Sh160 million for the entire period.


The county government has since considered reducing the rate per acre to Sh2,000 following proposals.

The February 2015 proposal also resolved to reduce the royalties payable to the county per tonne of soda ash from Sh120 to Sh10

However, Governor Joseph ole Lenku has dismissed the deal terming it "illegal and a ploy by characters to defraud the people of Kajiado."

Early this month with, the county government hired a tax collector to deal with big firms doing business in the county.

They are Tata Chemicals, East African Portland Cement, National Cement Company, Kenya Police Sacco and Jamii Bora Bank.

Mr Lenku has refused to recognise the "gentleman's agreement" between Tata Chemicals and his administration.

Tata Chemicals, in response through Executive Director, Harish Nair, has denied that the 2015 deal was fraudulent.


"We have worked with Kajiado County in a transparent and fair manner and we strongly deny allegations that we are or were part of any deals that were "an act of fraud," said Mr Nair.

The statement further noted that Tata Chemicals had always supported community initiatives and that they were bound by the firm’s code of conduct.

He reiterated that the lease rates had always been agreed from time to time to safeguard the existence of the company.

The push by the county government to have Tata Chemicals Ltd pay its rates has rattled the relationship between Governor Lenku and Mr Naikuni group.

In July, Governor Lenku nominated Mr Naikuni to the newly created Kajiado County Water and Sewerage Company.

He proposed the former Magadi Soda and Kenya Airways chief executive as the chairman amid protests from local politicians.


To protest the turn of events, Mr Naikuni has been boycotting water events in the county.

On Tuesday this week, he did not join the water company's board for an induction in the county, forcing his designate vice, Agatha Solitei to take over the role.

The Tata Chemicals rate default aside, Mr Naikuni is jittery at the county government's move to declare that all water sources are its property and do not belong to any individual or corporate entity.

In his speech during the Maji Awards on Friday, Governor Lenku cited some controversial water sources that were sources of conflict.

One of the water sources targeted is the Oloibortoto in Magadi of which Tata Chemicals has always claimed ownership.

This is the water source where the company draws its fresh water through its private pipeline.

The Governor has vowed to reclaim the water source.

The county government has threatened to cut off water supply to the company should it fail to pay for rates of their vast land.