Government targets land sale to settle Kenya Railways pension arrears
Mbadi noted that the scheme’s reliance on real estate investments had slowed down the release of benefits, but the government is now seeking to address the matter by supporting new transactions involving its land.
Retired Kenya Railways workers could soon begin receiving their long-delayed pension payments after the government moved to unlock funds from land assets owned by their retirement scheme.
National Treasury Cabinet Secretary John Mbadi told the Labour and Social Welfare Committee on Wednesday, August 20, that the Kenya Railways Staff Retirement Benefits Scheme (KRSRBS) has faced challenges because it was set up without cash contributions from members or sponsors.
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"From the onset, the Kenya Railways staff benefits scheme has operated on a non-contributory basis. No monetary contributions are made to the scheme by members or sponsors," Mbadi explained.
He noted that the scheme’s reliance on real estate investments had slowed down the release of benefits, but the government is now seeking to address the matter by supporting new transactions involving its land.
At the centre of the plan is 141 acres of land in Makongeni, which the Affordable Housing Board has expressed interest in purchasing. Mbadi said negotiations are underway and described the deal as a way of breathing life into the scheme’s finances.
"The affordable housing board has expressed formal interest in acquiring approximately 141 acres of land in the Makongeni area, which is currently owned by the scheme," he said.
He added that the land would host new housing units, while at the same time raising money for the scheme.
"The intended use of this land is for the development of residential housing units. This transaction presents a strategic opportunity for the Kenya Railways staff retirement benefits scheme to unlock significant value from one of its largest and most strategically related land assets."
Mbadi assured that proceeds from the sale will improve liquidity and create a steady flow of resources to pay pensioners.
"Once the sale is finalised, substantial funds will be generated, improving the scheme's liquidity position and enabling timely and consistent payments of benefits to retired members," he stated.
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