Anxiety over delayed Kitui coal project even as investor reassures locals

After the signing of coal mining contract between the Government and a Chinese investor on December 23, 2013 in Mwingi Town, it was expected that sounds of earth-movers would be heard in Mui Basin within a year, as the heavy machinery mine the mineral.

However, a year down the line, people’s expectations have grown cold, with nothing to show on the ground. “We expected by this time we would have pocketed compensation money and started new lives. We don’t know for how long we will wait,” said Mavuli Muthangya, a farmer whose land is within the coal belt. Following start of the multi-trillion shilling coal mining project, Mui residents, whose land was to be acquired for the project expected to become overnight millionaires as it has happened elsewhere with Standard Gauge Railway.

The signing of Benefits Sharing Agreement at Musila Gardens which saw Fenxi Industry Mining Group get the licence to mine coal in blocks C and D of the basin was witnessed by the Mining Cabinet Secretary Najib Balala, Suspended Energy and Petroleum Cabinet Secretary Davis Chirchir and Fenxi’s Vice President Yang Wushang.

The two blocks are thought to have more than 400 million tonnes of coal reserves valued at Sh3.4 trillion ($40 billion), according to the Ministry of Energy estimates. With a cloud of uncertainty now hanging over this multi-billion dollar coal project, Kitui leaders as well as the locals have grown weary, and are now pushing the Government to come clean and explain the delay.

Kitui Senator David Musila says the county leaders wrote to the acting Cabinet Secretary for Energy and Petroleum Henry Rotich  a fortnight ago, requesting for a meeting “to voice our concerns.” “People have grown weary of waiting. We want the Government to tell us the way forward over this project,” Musila told Weekend in Business. “We demand for the commencement of the work within one month otherwise we might be forced to demand that the Government starts a new process of looking for another concessionaire.”

A report prepared in February 2015 by Mui community’s liaison committee signed by the Secretary of the Committee Dr Titus Kivaa and Vice-Chairman Dr Wathe Nzau notes that among other things, within a year after signing the contract, Fenxi was supposed to have done a Resettlement Action Plan. The report says an external infrastructure feasibility study should ready by now, showing necessary road and electricity network, water supply and other infrastructure leading to the coal belt.

The report, which has been handed over to Kitui Governor Dr Julius Malombe notes that acquisition of land within the “coal operations area” should have been completed and payment for land done, as well as approval of a coal power plant and completion of Environmental Impact Assessment. “No steps have been taken towards any of those issues,” a section of the report reads.

Land adjudication

However Dr George Kariithi, a partner at Fenxi Company says the project is still on course, noting that delay in completion of land adjudication process and issuance of title deeds has held the project back. “The people of Mui and the leaders demanded that before their land is valued and are issued with title deeds, no work should commence. That effectively means we cannot acquire land or do Resettlement Action Plan before the process is complete,” said Dr Kariithi in an interview.

Dr Kariithi, whose firm Great Lakes Corporation partnered with Fenxi during the tendering process clarified that external infrastructure such as roads and electricity outside the coal basin is the work of the national government.

Documents from the Energy ministry indicate Fenxi will hold 89 per cent of the mining venture, while the State will control 11 per cent of the shares. The State will be entitled to a 23.6 per cent share of gross revenue generated from block C and 22.1 per cent from block D revenues.