The adoption of a report by Parliament’s departmental committee on land — in which the National Land Commission was accused of violating the law at least five times in the acquisition of land in Ruaraka, Nairobi, for two schools — is a watershed moment for the war on corruption.
The committee, chaired by Dr Rachael Nyamai, concluded that NLC officials are at the centre of a web of land deals, spun with the intention to “fleece and swindle public funds”.
And unlike the work of the joint committees on Trade and Agriculture that was last week widely condemned as a laundry initiated to whitewash sugar barons and cover up the shameful trade in contaminated sugar, the Lands committee report is one of the finest pieces of work by the Legislature this session.
While the MPs did not have the services of vaunted investigators — the committee only got a wishy-washy confidential report from the Ethics and Anti-Corruption Commission — its work is a measured, incisive and hard-nosed defence of public interest, something Parliament has not been doing in a while.
The committee wants the Director of Criminal Investigations to probe NLC chairman Prof Muhammad Swazuri as well as commissioners and other officers of the agency for possibly breaking the law in the acquisition of land for Ruaraka High School and Drive-In Primary School in Nairobi.
The MPs also want detectives to investigate possible collusion between Afrison Import Export Ltd and Huelands Ltd — the supposed owners of the land — and officials from the National Treasury and Ministry of Education.
The government officials are suspected of failure to sub-divide the land bought for the schools, and to protect government interests in the acquisition of various parts of LR 7879/4 “with an intention to fleece and swindle public funds”.
Since 2013, the government has purchased land from one vendor in transactions valued at about Sh9.8 billion.
It has already paid an estimated Sh5 billion and the remaining Sh4.7 billion is being demanded by the vendor for property in which its claim is not protected as the government does not have title to this land which, in any case, has an outstanding Sh150 million loan due to the receiver of a long-failed bank.
And in none of those transactions has the land been sub-divided and the government given its share.
With regard to the school saga, the committee inquired into two key issues: first, whose land is it? Is it public or private? And, second, the whole question of the transaction itself; whether it followed the Constitution and the law.
The committee’s conclusion was that the law was violated during the purported compulsory acquisition, and that there was collusion between the parties with a view to disadvantaging the taxpayer.
According to the report, Afrison Import Export Ltd and Huelands Ltd charged the title for LR No 7879/4 the day they bought it 1981 for Sh14 million.
They took a Sh21 million mortgage from Continental Credit Finance Ltd (in receivership) and a mortgage to secure the lending was registered against the title.
The money was to build 500 houses for Kenya Posts and Telecommunication Corporation, now defunct. After Continental went under, KPTC took a second mortgage of Sh165 million to finish the stalled housing estate, charging the same title, and apparently repaid the entire loan.
BUILT 196 HOUSES
It built only 196 houses, which were sold to the General Service Unit thorough the ministry of Provincial Administration and Internal Security for Sh64 million in 1988.
In 1982, the owners of the land — Afrison and Huelands — had applied for permission to the Director of City Planning to subdivide and develop the housing for KPTC. They did so through their company, Drive-In Estate Developers Ltd.
The director gave permission on April 15, 1984, but with conditions: the developers were required to surrender some land to the City Council free of charge for development of utilities.
There is some confusion in dates, but there was a claim — by the Lands Cabinet Secretary Farida Karoney, Prof Swazuri, the CEC Lands for the Nairobi County government Charles Kerich, and the Attorney-General — that Afrisons and Huelands declined the conditions and stopped the sub-divisions.
The point that the House Committee makes is that the estate was built by Drive-In, even though finished by the client, KPTC.
Secondly, the MPs also demonstrate that the surrender of land for utilities was not volitional but a legal requirement under the Physical Planning Act. As a matter of fact, if no land was surrendered, then Afrison was in breach of the law, according to the House probe.
Drive-In Primary and Ruaraka High schools occupied the land for a full one third of a century, or 33 years. During that period, the schools were fenced, buildings put up and other institutional infrastructure developed. And for all those years, Afrison never complained, the MPs note.
According to Ms Agnes Chege, the Principal of Ruaraka, and Mr John Thuo, chairman of the board of management, the school has been at its current location since 1981, on land given to it by Mr Andrew Ngumba, former mayor of Nairobi.
The school was issued with an allotment letter in 1999 and no one has ever complained that it was occupying their land. The institution only learnt that the land was being bought for them from the newspapers, said the chairman.
Drive-In Primary has been in its current location since 1986 and also said it was allocated the land by Mayor Ngumba.
The chronology given by the CS Lands, as quoted by the House team report, is a bit confusing. According to the evidence of the CS, the Director of Town Planning gave conditional approval on March 28, 1984 and the developer rejected it on March 5, a full three weeks earlier.
Afrison said the approval was given on April 15 and they allegedly cancelled the sub-division the same year.
On July 12, 1984, the Commissioner of Lands issued a letter of reservation for the school land to the Permanent Secretary for Education.
This does not appear to have been challenged as the only question on the sub-division by the developers was early this year — on February 7 — when they sought to confirm, 34 years later, if the alleged cancellation of the sub-division had taken place.
The Nairobi County Government and its predecessors did not produce a whole lot of records, and the CEC argued that the land was private in written submissions and public in his oral statement.
However, the CEC was more enlightening on the date of approval — March 28, 1984 — and the date of the alleged letter cancelling sub-division — April 5, 1984.
According to Afrison, conditional approval was given on April 15, 1984 and they rejected it for fear that it was going to be used to grab their land. One wonders how many approvals were given for the development of the property.
The second of the committee’s concern has to do with the nature of the transaction itself.
The NLC chairperson and the PS Education, Mr Belio Kipsang, said in their evidence the other initiated the compensation, but the MPs were satisfied that Prof Swazuri started the whole thing after receiving a complaint from Afrison.
The report says that other than the letter from Afrison, there was no evidence of communication between NLC and the complainant.
The complainant, too, did not address the Ministry of Education with the grievance as would have been expected if indeed the ministry was occupying its property illegally.
SH206 MILLION AN ACRE
According to the House team, it was not clear what basis NLC used to value the land at Sh206 million an acre.
NLC actually gave the wrong size of the land: 13.770 acres, while Afrison and the ministry of Education gave it as 13.5364.
The 0.2337 difference is material because it means an additional payment of Sh48 million.
Afrison, in its presentation to the committee, said the land had been valued by Camp Valuers at Sh5.9 billion.
The NLC valuation given to the committee was Sh3.269 billion while Camp Valuers had given NLC a value of Sh3.375 billion.
It is not clear if the valuers had arrived at two different estimations — one for the owners and another for NLC — or whether their position had been misstated by the vendors in their evidence to the committee.
There also was no public participation, as required by law, by way of notification of interested parties of the intended acquisition and an inquiry to gain their input.
The schools, Nairobi County Government, and certainly the local community ought to have given some input and background, yet, apart from a Kenya Gazette notice, no further consultation took place, according to the report.
The Lands committee was puzzled that even after occupying the property for 33 years without complaint, the schools were not advised to invoke adverse possession, a process accepted in common law.
And if the vendor was aggrieved by the occupation, why did they not complain even as the schools were fenced and expanded?
Prof Swazuri said that in processing the transaction, NLC relied on the advice of the AG that compensation be paid in full in accordance with the law, but the committee noted that NLC did not seek the AG’s opinion; the Ministry of Education did, and by the time of doing so, NLC had gazetted the acquisition and the PS Education had asked Treasury about the budgetary implications of the acquisition. They appeared to be merely ticking the right boxes.
The Physical Planning Act, Cap 286, requires surrender of land for utilities by developers, and MPs noted that no one pursued Afrison to ensure that they did so regarding their 196-unit development. Equally, despite being paid, Afrison did not clear the Sh150 million owed the official receiver of Continental Bank.
The NLC also seemed to haphazardly stagger acquisitions in respect of Afrison, MPs said. It seemed to be contemplating yet another one, for the Chief’s camp, which is on the same land.
In all those transactions, the land was never transferred to the government despite payments dating back to 1988, and NLC approved the payment of Sh3.2269 billion without the title deed. The title, which is in the name of the vendor and the official receiver of Continental Bank, is in the custody of the vendor’s lawyers.
In the opinion of the committee, there was a “deliberate lack of coordination” between the parties concerned — AG, NLC, City government, Education ministry and Treasury — “with a view to benefit the owner and disadvantage public interest and public good”.
Besides, NLC paid a third party, Whispering Palms Estate Ltd, and not the registered owners of the land.
The MPs were also unimpressed by the fact that the payment of Sh1.5 billion was put in a supplementary budget, rather than the annual budget.
In their opinion, the expenditure was “foreseeable” and “not urgent” yet the payment was “made in haste”, which displays “irresponsible financial management by Treasury, NLC and ministry of Education”.