SGR land settlement row could cost Sh3bn

Sunday June 23 2019

A train on the standard gauge railway in Mombasa. Delayed payment for land, which stalled completion of the Nairobi-Naivasha leg of the standard gauge railway, could be costing the taxpayer Sh21 million per day. PHOTO | FILE | NATION MEDIA GROUP


Delayed payment for land, which stalled completion of the Nairobi-Naivasha leg of the standard gauge railway (SGR), could be costing the taxpayer Sh21 million per day, according to documents seen by the Nation.

A letter by the chief executive officer of the National Land Commission (NLC) to the CEO of the Ethics and Anti-Corruption Commission (EACC) says the cash, which amounts to nearly Sh3 billion for the stand-off period, was being accrued as payment to the railway’s contractor for idle capacity and non-accessibility to the site.


However, Transport and Infrastructure Cabinet Secretary James Macharia on Sunday said the payment clause would only apply if the stipulated construction period lapsed. He added that his ministry had sought the help of the Ministry of Interior to clear the SGR corridor in a bid to avoid the extra costs being accrued due to the stalemate.

READ: SGR pay bombshell for prime land brokers on Narok-Kisumu route

The contractor, China Communications Construction Company (CCCC), stopped work on the 120-kilometre railway line in Empaash, Tuala, Oloosirkon, Milimani, Rankau, Kandisi, Merisho, Nkoroi, Kangawa, Oloolua, Ngong, Kimuka and Suswa following disputes on paying owners for their land.


Under the contract, phase 2A was to cost taxpayers Sh1.25 billion for each kilometre of the railway line that snakes through five counties — Nairobi, Kiambu, Kajiado, Narok and Nakuru. But the accrued payments for idle capacity would inflate the total building cost.


Landowners in Nkoroi had claimed Sh4.2 billion before the Ethics and Anti-Corruption Commission froze payment last year to probe the inflation of some parcels, a scheme the anti-graft watchdog believes was masterminded by NLC and Kenya Railways officials.

Delayed compensation of landowners set the stage for an inter-agency battle in January when the Kenya Railways Corporation, the contracting state agency, sued the NLC for stalling the process and, in turn, delaying construction.

Some Nkoroi residents told the Nation last week that they had not been paid despite confirming from the EACC that their land was not under any investigation.

Ms Anne Korir, whose house was demolished on June 14, said she was bounced from office to office until she confirmed from the anti-graft watchdog that her land was not among those under probe.

After living on her quarter of an acre plot for 17 years, she watched as her home, two greenhouses and livestock sheds were torn down despite not receiving a cent in compensation.


Communication between the NLC and EACC indicates that the Sh21 million-a-day payment had been in operation for a while and could have sparked Kenya Railways’ move to forcefully occupy land in Nkoroi two weeks ago.

NLC acting CEO Kabale Tache Arero wrote to the EACC chief, Mr Twalib Mbarak, on June 19, five days after the demolitions, seeking to prioritise compensation packages for Nkoroi residents.

READ: Pain of families awaiting pay for land seized for SGR project

NLC wants EACC to reveal the status of investigations into land parcels whose prices the anti-graft watchdog believes were inflated.

“In the spirit of cooperation and exchange of information and to help NLC unlock compensation for parcels that had been sampled for investigations, the commission hereby requests that it be assisted with the outcome of the investigations or confirmation of the status of the same further to preliminary findings conveyed to it. The NLC further requests for a joint sitting between its valuation working group and EACC valuers to exchange information on the identified parcels,” the letter reads.


There are 136 days between January 28 when the court battle went public, and June 14 when the government forcefully took possession of land in Nkoroi, Kajiado County. This means that, in that period, the Chinese firm could have earned Sh2.8 billion for idle capacity.

Phase one of the SGR line started passenger services on June 1, 2017 after a Sh323 billion cost for the 485-kilometre line. Freight services started in January, 2018. Compensation slowed down after EACC opened an inquiry into hundreds of suspicious claims.

EACC believes the inflation was for lining the pockets of a few NLC and Kenya Railways officials.

Yesterday, CCCC issued a statement explaining it had been given 54 months from January last year to complete the construction, meaning that as at now, they are within a 36 month deadline for completing the construction work.

Kenya Railways MD Philip Mainga declined to comment as the delays are linked to compensation of land owners, which is still under investigation by the EACC.

Former NLC head Muhammad Swazuri and his KR counterpart Atanas Maina have been charged with some of their juniors for allegedly inflating land prices for phase one of the line to defraud taxpayers of Sh221 million. EACC froze payment of compensation awards to allow it to probe the inflations.