Auditor General Nancy Gathungu has revealed that 529 parcels of land owned by Kenya Railways Corporation (KRC) have been illegally allocated to individuals. 

Gathungu also flagged the corporation for failing to value the land it owns. 

According to her, although KRC has put in place measures to recover the said land, most of them have not yet been recovered. 

The land which has either been illegally acquired by private individuals or encroached on by other government departments is in Mombasa, Limuru, Nakuru and Kisumu 

In the report for the year ending June 2024, Gathungu raised concerns over the failure by the corporation to maintain an updated asset register, as the one provided for audit did not reflect serial numbers for various assets, the location of the assets and land reference numbers. 

Further, she regretted that descriptions of land category, LR/certificate Number and land ownership status (Freehold/leasehold) were not indicated in the register. 

In addition, she raised concerns that assets had not been tagged for ease of tracing the assets in the asset register which is was contrary to Section 4.11.2 of the Operations and Maintenance Policy on Asset and Liability Management in the Public Sector which states that the accounting officer shall develop and implement an asset identification/tagging system in accordance with guidance provided by the National Treasury. 

Fair value 

The details of the report came after the statements of the financial position of the corporation reflected a balance of Kh521.6 billion in respect of property, plant and equipment, whose land balance is worth Ksh17.95 billion. 

Reads the report: “In the circumstances, the accuracy and fair value of the land balance of Ksh17,951,351,801 could not be confirmed.” 

In the report, Gathungu pointed out that the commission failed to pay Ksh8.3 billion in compensation to individuals whose land was compulsorily acquired. 

Reads the report: “Management did not explain why the balance has remained outstanding for a long period without being settled.” 

With regards to Mombasa, the report says that various parcels of land were allocated to private persons without the consent of the corporation, by either the Commissioner of Lands or local authorities. 

For instance, the report says that parcels of land adjacent to Mombasa Railway Station, measuring approximately 0.75 to one acre, were irregularly allocated to private persons who have since made development on the land. 

Reads the report: “Although management indicated that the leases were procedural, board approvals authorising the leases were not provided for audit. However, management has sought the intervention of the Ethics and Anti-Corruption Commission to repossess the parcels of land. The process is ongoing and has not been concluded as of June 30, 2024.” 

In the case of land in Limuru, the report says that a number of parcels were allocated to third parties without the consent of the corporation by either the Commissioner of Lands or the defunct local Authorities. 

According to the report, the said pieces of land include the land within Limuru Railway Station, constituting nine industrial plots measuring approximately three acres, as well as a piece of land within Kikuyu Railway Station, measuring approximately two acres. 

Although the management has sought interventions from various government entities, the said pieces of land have not yet been recovered. 

With regards to Land in Ziwani-Nakuru county measuring approximately seven acres belonging to the Corporation, the report says that the land had been encroached on by the County Government of Nakuru and is currently used as a bus park. 

The land, the report adds, had been allocated to private individuals by the County Government of Nakuru on a long-term lease of 25 years and Ksh37.4 million paid as premium and attracting an annual rent of Ksh13.3 million. 

Reads the report: “Management has not explained the steps being taken to revert the land to the tenants. Further, the Corporation continues to lose the opportunity to collect the annual rent of Ksh13,300,002.” 

In Kisumu County, the report says that residential units have been grabbed by organisations with no lease agreements and therefore no rent, leading to a loss of rent to the tune of Ksh27.4 million annually.