529 Kenya Railways plots grabbed, Sh27 million lost in yearly rent - Auditor General
Auditor General Nancy Gathungu revealed that land in Mombasa, Limuru, Nakuru, and Kisumu had either been grabbed or irregularly allocated, and most of it remains unrecovered despite the corporation putting in place measures to reclaim it.
Kenya Railways Corporation has lost control of 529 parcels of land to private individuals and government entities, with the Auditor General raising alarm over mismanagement, uncollected rent, and lack of asset records.
In her report for the financial year ending June 2024, Auditor General Nancy Gathungu revealed that land in Mombasa, Limuru, Nakuru, and Kisumu had either been grabbed or irregularly allocated, and most of it remains unrecovered despite the corporation putting in place measures to reclaim it.
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She criticised the corporation for not conducting proper land valuation and for failing to maintain an accurate and complete asset register.
Gathungu noted that the register presented for audit was missing key details such as serial numbers, land reference numbers, locations, land category, ownership status, and certificate numbers.
Additionally, she faulted the corporation for failing to tag assets as required by Section 4.11.2 of the Operations and Maintenance Policy on Asset and Liability Management in the Public Sector, which obligates accounting officers to implement an asset identification system as per National Treasury guidelines.
The audit report casts doubt on the reliability of the Sh17.95 billion land valuation listed under the Sh521.6 billion property, plant and equipment figure in the financial statements.
“In the circumstances, the accuracy and fair value of the land balance of Sh17,951,351,801 could not be confirmed,” the report states.
She further disclosed that the corporation has not paid Ksh8.3 billion in compensation to individuals whose land was compulsorily acquired.
“Management did not explain why the balance has remained outstanding for a long period without being settled,” the report adds.
In Mombasa, parcels adjacent to the railway station measuring between 0.75 and one acre were irregularly allocated to private individuals, who have since developed the land.
The allocations were made by either the Commissioner of Lands or local authorities without Kenya Railways’ consent.
“Although management indicated that the leases were procedural, board approvals authorising the leases were not provided for audit. However, management has sought the intervention of the Ethics and Anti-Corruption Commission to repossess the parcels of land. The process is ongoing and has not been concluded as of June 30, 2024,” the report reads.
In Limuru, several parcels within the railway station, including nine industrial plots measuring around three acres and land within Kikuyu Railway Station measuring two acres, were allocated to third parties.
These allocations were made without the corporation’s consent by the Commissioner of Lands or defunct local authorities. The report noted that efforts to recover these parcels have not borne fruit.
The report also cited land in Ziwani, Nakuru County, measuring about seven acres that has been encroached on by the County Government of Nakuru and is currently being used as a bus park.
The county allocated the land on a 25-year lease to private individuals, collecting Sh37.4 million as a premium, and earning Sh13.3 million annually in rent.
“Management has not explained the steps being taken to revert the land to the tenants. Further, the Corporation continues to lose the opportunity to collect the annual rent of Sh13,300,002,” the report states.
In Kisumu County, the report highlights that residential units owned by Kenya Railways have been taken over by various organisations without lease agreements in place. This has led to a rent loss of Sh27.4 million every year.
Despite the corporation’s claims of ongoing recovery efforts, the audit indicates that most of the land remains in the hands of grabbers, and the lack of clear documentation has made the recovery process even more difficult.
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