NLC faces probe over Sh2.8bn payments to land owners

National Land Commission Chairman Muhammad Swazuri responds to questions regarding compensation of land owners, before the Parliamentary Accounts Committee at Parliament Buildings on March 13, 2018. PHOTO | DIANA NGILA | NATION MEDIA GROUP

What you need to know:

  • The NLC explained to the committee that the delay in providing the essential details was because they did not understand the required format.
  • Some of the projects whose compensation are under query include Lamu Port South Sudan Ethiopia Transport (Lapsset) and Outering road.

The National Land Commission is facing investigations into the payment of compensation claims amounting to Sh2.8 billion to landowners affected by the construction of the standard gauge railway.

National Assembly's Public Accounts Committee (PAC) has directed the Auditor-General’s office to conduct a special audit into the payments, terming them suspicious.

The watchdog committee chaired by Ugunja MP Opiyo Wandayi ordered Auditor-General Edward Ouko to undertake the investigation into the disputed compensation scheme and furnish the committee with a report within 60 days.

“This committee has made this decision given the gravity of the matter. A lot of money running into billions has been purportedly used to compensate the landowners,” Mr Wandayi said.

CARTELS
According to the Auditor-General's report for the financial year 2014/15, the commission made the payments but did not produce documentary evidence to the auditor-general's office and the committee to determine whether the public got value for money.

The commission has been accused of working with cartels to deprive the rightful owners of their due compensation, paying fraudulent compensation without surveying the land and in some cases without valuation reports.

The committee issued the orders as a family in Mombasa accused the Muhammad Swazuri-led agency of disregarding a court order and scheming to deprive it of its rightful compensation amounting to Sh519.9 million for the land that was forcibly acquired to pave way for the construction of SGR.

The land in question, which measures 41.2 hectares, had been the subject of an inquiry at public hearings in Mombasa that were conducted by the commission, before it awarded Africa Gas and Oil Ltd Sh159 million as compensation for the land and Sh360 million for interruption of business.

ENCROACH
Trouble, however, began when the district physical planner brought to the attention of the family of Mr Kamau Thiong’o that the company had encroached on its land.

He advised the family to liaise with the district surveyor to establish the extent of the encroachment.

“There is encroachment to your plot by plot No MN/VI/4737, however the extent of encroachment is not yet established,” the district planner told the family in the January 10, 2013 letter.

“Plot No 755/VI/MN exists in our land registry and registered in the name of Mr Kamau Thiong’o,” he added.

The letter, signed by a Mr Manyala P.O. for the district planner, noted that the office had neither recommended nor issued certificate of compliance over the building plans, change of user, subdivision or consolidation on development application on this or part of the land.

Africa and Oil Ltd moved to the court and in a preliminary ruling, Justice Anne Omollo found that the ownership of the land was contested and ordered the NLC to deposit the total compensation sum of Sh519.9 million in an escrow interest earning account pending the hearing and determination of the case.

IRREGULAR PAYMENTS
The family in turn successfully challenged Justice Omollo’s order at the Court of Appeal in civil application No 44 of 2016.

Strangely, the NLC, the office of Attorney-General and the National Treasury supported the stay order in the Court of Appeal only for the land commission to ignore the same order and proceed to pay the money to Africa Gas and Oil ltd.

The commission is also on the spot over the payment of Sh1.5 billion to Whispering Palms Estate as compensation for the land on which two public schools in Nairobi are located, even though the company does not own the land.

The money is part payment of Sh3.3 billion, which is the estimated cost of the land.

The matter is under investigations by the Ethics and Anti-Corruption Commission (EACC).

COMPENSATION

On April 2015, the commission further paid Sh796 million to Almasi Ltd for compensation on land acquired for the expansion and improvement of Outering Road, even though the records show that Afrison Export Import Ltd and Huelands Ltd claim ownership of the same land.

The document we have seen further show that the commission paid Sh667.9 million to a company called Dopp for a 13.3ha piece of land in Mombasa registered as MN/VI/1042, but the existence, and even the ownership of this land is questioned.

Maganda Scheme received a total of Sh375.4 million for two pieces of land, measuring 6.448ha (Sh215 million) and 5.645ha (Sh160 million), Miritni Free Port received Sh1.475 billion for 22ha, East African Gas Company received Sh700 million for five pieces of land measuring, 1.147, 0.298, 1.308, 1.052 and 1.589 hectares, respectively.

Colfax Holding Ltd also received more than Sh210 million for seven pieces of land measuring between 0.279ha and 1.612ha, Geyser International Ltd was paid Sh372 for 5.282ha, and a further Sh5.8 million as compensation on the piece of land while Fort Properties was paid Sh92 million for 0.590ha.

ROADS
In recommending for audit, the committee raised queries on how the payments were determined after huge disparities emerged with some individuals being paid as high as Sh6.4 million for 3.25 acres while others with a similar size paid Sh3 million.

“This team wants to know if the land commission ascertained the parcel numbers, precise acreage and sizes and independently confirmed the accurate value through valuation,” he said.

Mr Swazuri, Director Valuation and Taxation at the commission Salome Munubi and chief executive officer Tom Chavangi, had explained to the committee that the delay in providing the essential details was because they did not understand the required format.

Some of the projects whose compensation are under query include Lamu Port South Sudan Ethiopia Transport (Lapsset), Outering road, Dongo Kundu road, Sotik-Ndanai, Cheptiret-Baraton, Kangema-Gacharage roads, Nairobi southern and Meru eastern and western bypasses.