How Railways land was allocated to developers

A total of 529 parcels of land belonging to Kenya Railway Corporation have been illegally allocated. 

A review of land records for Kenya Railway Corporation (KRC) by Auditor General Nancy Gathungu shows that although management has put in place various measures to recover the irregularly allocated land, many pieces of land belonging to the corporation, across the country, are yet to be recovered.

In her report for the year ending June 2024, Ms Gathungu said various parcels were allocated to private persons without the consent of the corporation, by either the Commissioner of Lands or local authorities.

For instance, parcels of land adjacent to Mombasa Railway Station measuring approximately 0.75 to one acre were irregularly allocated to private persons who have since made developments on the land.

In Limuru, she reported that various parcels were allocated to third parties without consent by either the Commissioner of Lands or the defunct local authorities.

She referred to land within Limuru railway station, constituting nine industrial plots measuring approximately three acres, and a piece of land within Kikuyu railway station, measuring approximately two acres.

However, she said the management has sought court intervention to repossess 27 of the illegally allocated parcels. KRC is also seeking intervention of various government agencies like EACC, Ministry of Lands and Physical Planning, National Land Commission and Director of Survey to assist in recovery of irregularly allocated land.

Gathungu also reported encroachment of land in Ziwani, Nakuru. She said the land measuring approximately seven acres in Nakuru Ziwani Estate, belonging to the corporation, has been encroached on by Nakuru County Government and is currently used as a bus park.

The land had been allocated to private individuals by the county government on a long-term lease of 25 years, and an amount of Sh37.5 million was paid as premium and attracting an annual rent of Sh13.3 million.

“The management has not explained the steps being taken to revert the land tenants. Further, the Corporation continues to lose the opportunity to collect annual rent of Sh13.3 million,” Gathungu stated.

In Kisumu, the report says 247 residential units have been forcefully occupied by organisations with no lease agreements and therefore not paying rent. The Corporation, she said, is therefore losing Sh27.4 million in rent annually.

Other issues raised included long-standing debtors, with the statement of financial position to financial statements reflecting a balance and other receivables of Sh43.9 billion in respect of trade and other receivables. “The ageing analysis schedule provided revealed that an amount of Sh7.8 billion had been outstanding for over one year. No explanation was given for the failure to recover long outstanding receivables,” Gathungu noted.

Other receivables balance of Sh201.5 million includes World Bank receivables balance of Sh131.8 million, which arose during the pre-concession period and has been outstanding in the Corporation’s books for a long time.

Gathungu said the management did not demonstrate efforts to recover this debt or provide evidence on how they intend to recover the outstanding balance from the World Bank.

Unsupported General Advances issues were also raised. According to Gathungu, included in other receivables balance of Sh201.5 million is general advances balance of Sh61.8 million relating to advances to individuals and suppliers of goods and services, some dating back to 2010 and remain outstanding.