State wants coal dispute resolved out of court

By PHILIP MUASYA

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The government is now seeking an out of court settlement for a case stopping it from concluding a coal-mining deal in Mui basin, Kitui County with a Chinese firm.

Speaking to The Standard on Sunday, some petitioners who have met senior government officials say the government is keen on an out-of-court settlement of the deadlock that halted the multi-billion shillings project.

However, the two groups in court – Mwingi Central Development Forum and Mui Basin Liaison Committee, which is headed by Law Society of Kenya chairman Eric Mutua – have vowed to press on with their court case until the contentious issues they have raised in their petitions are addressed.

Energy and Petroleum Cabinet Secretary Davis Chirchir on October 18, met executive members of the liaison committee and implored them to withdraw their case to pave the way for coal mining.

Members who attended the meeting were Wathe Nzau (vice chairman) Peter Kivaa, (secretary) and Mumo Kisau (treasurer). Mr Mutua and Florence Kitonga (vice secretary) sent apologies.

Also in attendance were the ministry’s Principal Secretary Joseph Njoroge, chief geologist John Omenge, principal superintending geologist Joseph Ndolo and George Kariithi, a director with Great Lakes Corporation which is a key partner of Fenxi Industry Mining Group that won the lucrative tender to mine an estimated 450 million tonnes of coal in blocks C and D of the expansive basin.

The meeting followed an earlier one on October 15, where the Cabinet Secretary, ministry officials and Dr Kariithi met members of Mwingi Central Development Forum led by Jacob Mbaya (chairman), Dr Kithung’a Nzuki (secretary) and Isaac Kitunguu (treasurer) among others.

Tendering process

The latter group, led by Mr Peter Musyoka on August 13, last year filed a suit at Machakos High Court stopping government from negotiating the coal mining deal with Fenxi Company, claiming the tendering process was steeped in secrecy and was not in the best interest of Mui people.

Mr Mutua also filed a petition in the same court in July, stopping the Government from signing the Benefits Sharing Agreement with the Chinese company.

He cited among other things exclusion of the liaison committee members in negotiating the deal and failure by the government to honour a budget presented by the committee. The two cases were however consolidated on September 5.

Speaking to The Standard on Sunday, both Nzau and Musyoka said the Cabinet Secretary wanted to know the sticky issues that led to the stalling of the project. Mr Chirchir was concerned that the court cases were derailing development efforts and expressed his wish to have the matter settled out of court.

 “As LC members we poured our frustrations to the Cabinet Secretary over issues touching on our exclusion from the contract making negotiations, failure by the government to fund our activities and government’s disinterest in carrying out adjudication and issuance of title deeds to residents of Mui basin,” said Nzau.

The two denied either party promised to withdraw the court cases, saying that such a move would only be considered if and when the government clears the air on issues of compensation, resettlement and issuance of title deeds. They also want the BSA explained to Mui residents.

 “We did not at any time promise to withdraw the cases. We gave the Cabinet Secretary a memorandum on issues that must be addressed before we can think of that (case withdrawal)” said Mr Musyoka. “For example the government talks about compensation yet the Mui people have no title deeds, how will that be possible?”

The teams demanded that the local community be incorporated as shareholders of Great Lakes Corporation, which is cited as a key partner of Fenxi.

Nzau said the Cabinet Secretary apologised to the Liaison Committee members on their exclusion from the contract making process and promised to consult the Attorney General on the possibility of having their views included in the BSA before its signing.

“He regretted the leakage of our budget to politicians and activists who have used it as a weapon to discredit our work, portraying us as money minded,” he said. “Chirchir also agreed to fund our activities and advised us to revise the budget and submit it as soon as possible.”

Budget

Upon their election, the 13-member committee prepared a three-year budget amounting to Sh150 million which the Energy ministry trashed describing it as unrealistic, thus setting the committee and the government on a collision course.

Chirchir is reported to have directed Ndolo and Kivaa to prepare an agreeable budget, which will see the team funded to carry out its work.

Ndolo said: “We are still negotiating; hopefully soon we will come up with something concrete.”

The Cabinet Secretary also promised to consult with his Lands counterpart Mrs Charity Ngilu to expedite the issuance of title deeds in the coal-rich belt.

Nzau decried lack of political will on the project saying selfish interests were taking centre stage in a matter that touches on Kitui County development. The yet to be signed BSA seen by The Standard on Sunday indicates that Fenxi would invest USD189 million to mine coal in each of the two blocks and would also commit USD63 million as a guarantee to the government.

The document further indicates that the government would get 23.6 per cent and 22.1 per cent of all the revenue from block C and D respectively.