Kenya: Land Deals May Sink ICT City
Plans to build a technology city and create 40,000 jobs have run into allegations of corruption and unfair dealings. The technopolis is to be built on a 5,000-acre piece of land near Salama on the Nairobi-Mombasa highway.
The government has already paid Sh1 billion for the land. But now small-scale landowners are complaining that they were short-changed in the transaction and that the land values were inflated. The farmers complained that brokers bought their land at throwaway prices, then sold it to the government at much higher prices. They are now threatening to block the project unless they are paid more.
Although they support the project, they have accused politicians, some Information Ministry officials, and unscrupulous businessmen of using the Information Communication Technology Centre, as the proposed technopolis is formally called, to enrich themselves.
At the centre of the conflict is the distribution of the Sh1 billion paid by the government for the 5,000 acres. The government concluded the deal last December and has already paid the whole amount in two batches of Sh400 million and Sh600 million. Treasury released the second portion in January.
The purchase affected 606 farmers, all members of Malili group ranch, with 7.8 acres each. Each farmer was to be paid Sh1.56 million. However, with lawyers, surveyors, not to mention brokers, involved in the transaction, it was later agreed that each farmer would be paid Sh1.4 million.
According to Eric Mutua, a lawyer retained by the directors of the group ranch, the amount has further been revised to Sh1.1 million. Development on some of the farms is being valued for compensation. Mutua was paid Sh28 million as legal fees.
The farmers claimed that their directors sold their land without seeking their consent and that they have not been paid. "We were told that the we would receive Sh1.4 million for our plots but it seems we have been short-changed," said Stephen Mbuti.
He claimed that their directors left them with no choice, telling them that if they did not do sell, they would lose the land anyway. "The project is likely to provide jobs for our children but we are asking the government to ensure that the shareholders are first compensated for their land," said area councillor Jonathan Katete.
Responding to claims that money has not been paid to the shareholders, Mutua told the Nation that he had released over Sh850 million. " I paid Sh1.4 million to individual shareholders who produced valid documents when I received the first batch of Sh400 million and I am distributing the balance of Sh600 million," he said.
He said the ranch officials had sent over 500 letters of allotment. "I write cheques and beneficiaries will collect them from their offices in Machakos." He claimed he had received death threats over the transaction and had reported the matter to police. "Undeserving people want to benefit from the land sale," Katete, who also spoke of similar threats, said.
Mbuti said 2,347 Malili ranchers bought a total of 22,153 acres from Major Joyce, a British World War 1 veteran. But at an annual general meeting, it was resolved that the land be sub-divided and each member was allocated 7.8 acres. Farmers with more shares got larger plots.
Records show that Josiah Munuka, the former chairman, was paid Sh18 million while Julius Kilonzo and Mr Peter Kanyi, who are directors, received 16 million each. Ranch officials said they used Sh400 million to pay 120 of the 606 members and for other services, a contention that has been rejected by shareholders who claimed that the list of beneficiaries was not genuine.
Other complaints were related to a firm which is demanding Sh111 million for "sourcing and obtaining the buyer". The company has already been paid Sh40 million and Mutua insists that the balance of Sh71 million that it is demanding will not be paid.
In a demand letter to Mutua seen by the Nation, the company says it was entitled to Sh21,000 an acre as agency fees. Even if that were the case, its total fees would be Sh105 million, not Sh111 million. Mutua argues that the company is not entitled to any more money because the tender was awarded by the Ministerial Tender Committee guided by the Public Procurement and Disposal Act.