The twists and turns in tussle over multi-million shilling city land

A section of the land in Eastleigh market, Nairobi, allegedly grabbed by a private developer who continues to construct a shopping mall despite a court order. [PHOTO: FILE/STANDARD]

A two-acre piece of land at the heart of Nairobi’s busy Eastleigh estate is at the centre of a raging court battle. Two companies are fighting over a contentious award of a multi-million shilling contract by the Nairobi County Government.

The contract initially valued at Sh400 million has seen suspicious dealings between one of the companies and the Nairobi County Government that has resulted in construction of a mall on a piece of public land that once housed the Eastleigh market.

Communication in our possession shows that despite orders from the National Land Commission (NLC), the courts and the county government, one of the companies that has laid claim to the piece of land in unclear circumstances continues to construct the mall.

The standoff between the two contractors and a subsequent claim of land grabbing by Eastleigh residents can be traced back to nearly a decade ago in 2008, when then City Council of Nairobi advertised for a Public Private Partnership (PPP) in redevelopment of Eastleigh Market through a lease.

The city council would provide the land, then a private entity would construct a mall, shops, offices and apartments.

False lease

In a Build Operate Transfer (BOT) model, the company that won the bid would finance, design, construct and develop the facility. The land would be leased out to the company for a 45-year period, after which it would be handed back to the county government.

After what insiders term a rigorous vetting process, only two companies, Golden Lime International Limited and Blue Sea Shopping Mall, made it to the final bidding stage. Only one was awarded the contract.

“During a full council meeting held on Tuesday November 18, 2008 the council passed a resolution awarding the construction of a complex mall to Golden Lime International Limited. The council is in the process of preparing the Partnership Agreement,” reads a letter from Mary Ng’ethe, the then Director of Legal Affairs at the City Council of Nairobi, to Golden Lime International Limited.

Golden Lime was to begin construction in two months.

This was, however, not to happen as Blue Sea Shopping Mall, through its directors Farah Mohamed Barrow and Ali Sheikh Mohamud went to court to challenge the award. Their core complaint was that the land on which the mall was to be built had already been leased out to another company, Alfa Traders, by the City Council.

Official documents from the registrar’s office show that Farah Mohamed Barrow is also a director at Alfa Traders.

This was, however, contested by the city council, which had a year earlier written to the chief land registrar insinuating that they were aware that a false lease to a public parcel of land had been issued.

“Information reaching this office is that a lease has been issued and the same was fraudulently obtained and should be revoked immediately,” a February 15 letter from Ms Ng’ethe to the chief land registrar reads. “The above property is a market. It is public utility.”

At the time, the market had 400 stalls rented out to small scale traders by the City Council.

Peter Kibinda, the then director of planning, had also previously confirmed the property as a public utility in an affidavit sworn on June 11, 2007. In subsequent affidavits, Ms Ng’ethe says there are no records of the circumstances under which Alfa Traders’ lease was processed.

The revocation, however, never happened. Ms Ng’ethe again wrote to the Chief Land Registrar on December 2, 2008 seeking verification of the status of ownership of the land. It turned out that the letter that Ng’ethe wrote on February 15, 2007 was not acted on.

An official stamp from the lands office shows that Ms Ng’ethe’s February 2007 letter was received on December 2, 2008. The same day she wrote to the lands office to again confirm the status of the land in question.

Criminal act

Two weeks later, on December 19, 2008 the Lands office cancelled the lease via Gazette Notice Number 11951. The cancellation of the lease is also noted on the council’s mother title deed, which it has had since 1969.

A year after the award of the contract and after the revocation of the Alfa Traders lease, yet another twist emerged. Another company wrote to the county council alleging to have been awarded the contract.

The letter from one of the leading law firms to the council reads thus: “Our client informs us that it was awarded a private public partnership with the city council of Nairobi on the reconstruction of the Eastleigh Market...some individuals after realising that our client was about to be awarded the contract and in furtherance of a criminal act, fraudulently registered a company with a similar name as that of our clients... we advise you to hold any dealing you may have with these individuals,” the letter reads.

Attached to the letter was a list of the company shareholders. The new company contesting the award was called Goldenlime International Limited. Eerily similar to Golden Lime International Limited which the city council maintains got the contract.

According to the council though, the documents from the Registrar of Companies produced were not genuine.

“Not surprisingly, and through deceit, Farah Mohamed Barrow once again appears as a director of a dubious company that claimed to have been the successful bidder for the public-private partnership aforesaid,” Ng’ethe says in her affidavit.

Farah again appears as one of the directors of a Goldenlime International Limited. Goldenlime’s lawyers say failing to act on this matter, “may subject you and the City Council of Nairobi to costly litigation” and that they had lodged a complaint with the police.

The curious case of the Eastleigh Market contract continues. Between 2009 and 2014, court battles over the PPP continued.

At some point, Alfa Traders went to court to challenge cancellation of their title but later withdrew the case, meaning the cancellation was not contested.

There was a court order during that period for the status quo, that no private developer should touch the land, to be maintained.

However, with the change of leadership in county government after the 2013 elections, a new development occurred. Ahmednasir Abdikadir & Co Advocates wrote to Governor Evans Kidero’s office on February 3, 2014 regarding the same matter.

The Nairobi County Government legal secretary, Karisa Iha, wrote back to the lawyers saying the subject matter of the land, mentioning Ali sheikh Mohammed and Farah Mohamed, had been placed in his hands to reply.

The gazette cancellation of the lease to Alfa Traders and the court order preventing anyone from acting on the land either through the PPP or through private ownership was still in force.

However, Karisa’s reply changed everything: “Records held by the county and the latest search confirms that your clients are the registered and rateable owners of the above property.” He reminded them that the case they had filed in 2008 against the City Council and other parties over the land was still pending and that the orders not to touch the land were still in force.

“The county has no objection to your clients taking vacant possession of the premises subject to them discharging the court orders,” Karisa said.

Forged documents

On March 20, 2014, the County Government of Nairobi approved Alfa Traders’ building plans. The letter was signed by the Director of City Planning and copied to the Commissioner of Lands.

When Alfa Traders’ building plans were approved, Golden Lime International Limited, through their lawyers, Gitau Gikonyo & Company Advocates, moved to court and wrote to the Ethics and Anti-Corruption Commission (EACC) to challenge the approval of the building plans, claiming the approved building plans were illegally and fraudulently submitted.

“It is apparent that the Nairobi County City officers have been corrupted and unduly influenced by various known individuals to unlawfully, using fraudulent means and forged documentation, gain possession of the property, a public utility and converting it to a private property,” they said in the letter to the EACC, asking them to investigate the matter.

Traders from the Eastleigh market publicly protested this, speaking of harassment and also filed a court case to stop the construction. Early this year, Governor Kidero appeared on record telling the traders to go back and sell their wares at the market.

In a televised interview, he said, “They had started building. I stopped the construction and referred the title deed to the National Land Commission (NLC) and I have asked the NLC to cancel that title.”

In June of 2014, the county government cancelled the approvals it had granted Alfa Traders for the building of the mall.

“It has emerged that the parcel of land involved is in ownership dispute and there exists court orders restraining the county from dealing in any way with the property. Please be advised that the signed building plans and the construction permit in your possession are hereby disapproved and therefore invalid,” said the letter written by the Director City Planning JK Barreh.

An enforcement notice dated February 4, 2016 from the City Council’s director of planning exists in the council’s records, directing Alpha Traders to immediately stop further development on the parcel of land.

Construction of the Blue Sea Shopping Mall is ongoing, despite numerous hearings and warning letters to cease construction. Eastleigh Market traders filed a suit against Alfa Traders, but a letter dated April 11, 2016 from the NLC shows that the developers and their counsel did not attend the hearing.

The matter is under investigation by the NLC and the Ombudsman’s Office.

A letter dated April 12, 2016 from the NLC to the National Construction Authority (NCA) says that the lease to the property was revoked and pushes for the cancellation of any awarded licences.

“The lease was revoked but the private occupants have defied official instructions to vacate the parcel of land. This is a request to your office to recall any construction licence that could have been issued to them because if at all such a licence exists, it was obtained through deceit. And if such a license has not been issued, this is to request you to cause an inspection of the site to compel immediate cessation of any construction activity,” wrote Antipas Nyanjwa, the Deputy Director, Investigations and Forensic Services.

On May 4, 2016, NLC Chairman Muhammad Swazuri asked his deputy director of investigations to investigate the matter.

When The Standard on Saturday visited the site on Thursday, and construction was still ongoing.