The Senate has been told how trustees of the Kiambu Institute of Science and Technology (Kist) used part of the institution’s land to obtain a bank loan of more than Sh100 million.
During a sitting of the Senate Committee on Education at the institution yesterday, details emerged of how the trustees took a Sh100 million loan in 2012 and a further Sh58 million loan in 2014 using the institute’s title deed as collateral.
The institute’s Board of Trustees and Board of Governors (BOG) have not been seeing eye to eye over the management of Kist’s assets, including land.
Senators embarked on a fact-finding mission after a petition by nominated Senator Isaac Mwaura to investigate the matter that has made the institute almost miss out on a Sh2.2 billion expansion project funded by the German Government.
BOG chairman Josiah Kariu told the committee that no development project was funded using the loan money. He said the trustees had refused to repay the two loans, thus forcing the institute to seek funds to secure the land from being auctioned.
The team was told the institute was using school fees to pay Sh10.9 million every term to offset the loan.
Details also emerged on how the trustees had leased out the coffee plantation and rented out staff houses and the carpentry workshop to outsiders.
County Assembly Lands and Planning Committee chairman Hezron Gachui told the Senate team that during their probe, they found that the trustees were getting Sh3.7 million from the workshop and Sh1.3 million from coffee sales each year.
“We found out that the trustees were also renting out staff houses to outsiders at current market rates. A three-bedroom house was going for Sh32,000 while a two-bedroom house was going for Sh25,000. They were making Sh662,522 from the occupied houses,” Mr Gachui said.
The MCA said despite the trustees collecting Sh14.7 million annually, they had put their annual expenditure at Sh23 million after stating that they were operating at a monthly deficit of Sh347,000.
Gachui said some of the expenses were broken down as follows: Staff salaries (Sh171,000), electricity (Sh150,000), administration costs (Sh50,000), housing (Sh83,000) and security (Sh34,000).
The Senate committee was told the trustees operated a separate bank account and did not use the money they collected from leasing out the institute’s property to run the institution’s affairs.
Mr Kariu told the committee they had rejected an offer by the trustees to give the institute 70 acres and remain with the rest.
“We want the whole land since it belongs to the institute. Our students do not have a playing field and we need space for the construction of more staff houses and Kist production unit,” he said.
Senate committee chairman Andrew Langat said the submissions by the BOG, Kist staff and residents had exposed the rot at the institute.
“This is a scandal of the worst kind. It is sad to note that a loan was taken, no project was done for the institute and the school fees paid by students is being used to offset it. It is sad to also hear that the principal and teachers have been paying rent to the trustees. This committee will make recommendations according to the Constitution of Kenya,” said Mr Langat.