Fresh details have emerged exposing how public land earmarked for government use was converted into private holdings and later subjected to massive compensation claims under infrastructure development programs, draining billions of shillings from taxpayers.
A close examination of Resolution 212, passed on 28 January, shows that while the committee routinely clears numerous projects, specific land transactions linked to the National Land Commission (NLC) reveal a consistent pattern of delayed payments, escalating valuations, and controversial interest calculations.
Under the Commission’s compensation framework, payments are categorized into three schedules. Schedule A covers payable private land where ownership is verifiable. Schedule B applies to land where ownership cannot be determined and is therefore unpayable. Schedule C applies strictly to public land, which belongs to the government and does not attract compensation. Investigations show that parcels with clear public origins were processed in ways that blurred these classifications.
The LR No. 10424 compensation puzzle
The first parcel under scrutiny is LR No. 10424, originally registered in the name of East African Portland Cement Company Limited, now East African Portland Cement PLC.
The land was first gazetted for acquisition on 25 July 2014, covering 42.989 hectares. The proprietor was awarded and paid KSh610,880,000, based on a market valuation of KSh5 million per acre.
Subsequently, through Gazette Notice No. 7090 of 10 October 2014, an additional 39.259 hectares were gazetted. On 22 April 2016, a further 4.6054 hectares were added. However, records show that the Commission neither awarded nor paid compensation for the additional 39.259 hectares at the time, despite Kenya Railways taking possession of the land for the Standard Gauge Railway project.
Curiously, in December 2021, the original parcel was subdivided into three plots—LR No. 10424/1, 10424/2, and 10424/3. Consequently, the parent title ceased to exist, causing confusion because the additional acquired land had not been compensated.
A valuation report prepared later for the additional land “adopted the same rate for land as at the period of gazettement and the first award.”
“The base rate at the time of valuation is 13%. If applied over five years, the interest amounts to about KSh362,487,978,” concluded the Land Valuation, Taxation, and Finance Committees when considering whether the Central Bank of Kenya base rate was applicable pursuant to Section 117 of the Land Act on the payment of interest.
The application of interest at 13% over five years significantly inflates the total compensation, despite the land having been in government possession for years. Its prior occupation by the government effectively renders it public land that does not meet the compensation threshold.
“It is obvious that this money should not have been paid, but someone processed and got it approved. Kenyans lost hundreds of millions through interest alone,” the source said.
LR No. 209/12076 and the Arusha Stores dispute
Another contested parcel, LR No. 209/12076, had previously been gazetted for the acquisition of 0.075 hectares and compensated at KSh60 million per acre. A later gazette notice covered an additional 0.1304 hectares that Kenya Railways had already taken possession of.
The valuation schedule indicates KSh557,673,813 under Schedule A and KSh22,233,070 under Schedule B, bringing the total to KSh579,906,883 for two project-affected persons.
Correspondence dated 26 January 2018 shows that Arusha Stores Limited rejected a proposed award of KSh17,256,095 for its plot.
“We had already excavated the cotton soil from the plot and proceeded to backfill it at our own cost and expense,” the company stated in a letter.
“We had put up a perimeter wall around the property, which was demolished during the construction of the railway, occasioning further loss.”
Arusha Stores demanded a revised compensation of KSh34.5 million, citing additional development costs and disturbance.
Again, the valuation committees sought direction on applying the 13% Central Bank base rate under Section 117 of the Land Act. When applied over five years, the interest alone would amount to KSh14,451,495, significantly increasing the final payout.
From public reservation to private ownership
The land in question was historically reserved for government agencies, dating back to 1974.
The acquisition request reportedly came from the Ministry of Labour for the construction of a parking lot for the National Social Security Fund. It is unclear how the Kenya Urban Roads Authority became involved in the process, as existing documentation provides no explanation.
Historical records show that the land was reserved for government use, categorizing it as public land under Schedule C, which does not attract compensation.
However, documents attached to the NLC report reveal how the property transitioned into private ownership and was subsequently scheduled for compensation.
Quincy Stores presented a letter dated 24 July 1998 indicating that they were allocated the parcel by former President Daniel Moi after paying KSh5.2 million.
Information obtained from the Ministry of Lands corroborates the allocation, with affidavits from Ephantus Murage Mundia and Wetangula & Adan Advocates affirming the same.
The land subsequently changed hands several times. On 29 March 2006, it was transferred to Auto Silo Queensway Ltd for KSh65,000,000. Frontier Properties acquired it for KSh100 million on 28 December 2011, and it later changed hands to Grassy Limited, which paid KSh500 million on 24 December 2024.
A later market valuation placed the property at KSh520 million, and the final acquisition cost was set at KSh731.6 million by the NLC.
The property was surrendered and converted from LR 209/13708 to NRB Block 30/19. The escalation in value from KSh5.2 million to KSh500 million occurred despite its historical classification as land reserved for government agencies.
Documentation seened by Kurunzi News demonstrates how public land was privatized, traded, and ultimately positioned for compensation at dramatically inflated values.
