Lands bosses under pressure over Sh1.5b payout

City Cabanas hotel located at the junction of Airport North Road and Mombasa Road in Nairobi. [Courtesy]

National Lands Commission (NLC) yesterday held a crisis meeting over the controversial payout of Sh1.5 billion to the owner of a city hotel as compensation for compulsory acquisition of land for construction of the Nairobi Expressway.

The payment was done despite the High Court barring NLC from transacting over the land until a case in court is determined.

On December 11, last year, the High Court in Nairobi gave an injunction for payment of the cash to Rose Njeri Macharia, the proprietor of City Cabanas and Cabanas park until the land dispute with Simandi Investments Limited was determined.

Justice Samson Okong'o ordered that no payment should be made by the NLC on behalf of Kenya National Highways Authority (KeNHA) to Ms Macharia for the LR NO 209/11293/1.

On March 4 the judge allowed NLC to pay Macharia half of the amount pending the ruling on the land dispute.

However, NLC went ahead and paid the city trader Sh1.5 billion.

Last week, the court began contempt proceedings against the NLC chairman Gerishon Otachi and chief executive officer Kabale Tache for the payment.

Yesterday, the commissioners spent the better part of the day deliberating on the matter even as it emerged that the owner of City Cabanas hotel and Cabanas park had not been listed among 40 private firms and government parastatals to be compensation.

Mr Otachi said that they were meeting to deliberate on the matter.

Sources said the spotlight is on the CEO and two committees for their role in the payment.

Sources further said that the NLC chair recused himself from the matter and asked the commission to do due diligence before making the payment.

In an email seen by The Standard, the chair had warned that the payment should only be done after following proper procedure.

On January 23, KeNHA transferred Sh2.3 billion to NLC's National Bank Hill Branch account for payment for compulsory acquisition of land.

The RTGS transfer was meant to pay 11 landowners including the payment of Sh1.6 billion for Cabanas Hotel, and Sh273million for Cabanas Park.

The feasibility study for the 27km Nairobi Expressway that runs from Mlolongo town to Waiyaki Way in Westlands and road design plans identified 34 acres of public and private land to be acquired for the road.

From the details, land and building compensations will cost the government over Sh4.1 billion.

The payment to Cabanas owner is the biggest and was done at Sh1,647,277,792 for 4.0523 hectares and another Sh273,475,167 for Cabanas Park.

Simandi Company argued that they bought the land from Kenya National Chamber of Commerce and Industries in 1994 while Macharia claims that she acquired the land from the same firm.

Efforts to get a comment from the commissioners were futile as they did not respond to calls or text messages.

National Assembly Lands committee chairperson Rachel Nyamai said they will investigate the matter.

"We have taken note of the matter and as a committee, we are meeting today to review the issue of the payment," said Nyamai.