Nairobi County is on the spot over the irregular transfer of a Sh1.2 billion parcel of land to a private developer.
The defunct City Council of Nairobi allegedly transferred the piece of land to Hass Petroleum Limited.
The probe comes after the Auditor-General’s 2017/2018 Financial Year report revealed that the county could have lost Sh1.2 billion in the illegal land transfer and another Sh22 million as the value of destroyed properties.
According to the report, the 3.03-hectare Nanyuki Roads Store and Depots land located in Industrial Area was demarcated and 1.227 hectares hived off and allocated to M/S Hass Petroleum Limited, yet the parcel had been reserved for storage of road maintenance materials.
The Auditor-General questioned the process of allocating the land to the private developer, saying it was not possible to confirm if it was transparent, given no records were provided.
Appearing before the Public Accounts Committee (PAC), City Hall Director of Survey Geoffrey Cheruiyot said the land was hived off and leased to Hass for a period of 50 years.
He said the property was leased on February 3, 2010 after a council meeting on January 26 that year, but that the transaction took place under unclear circumstances.
It emerged that only ground rent valuation was carried out to determine the rate the firm would pay for occupying the land.
“The valuation that was done was not for purposes of market value of the land but for determination of ground rent,” said Director of Valuation Isaac Nyoike.
Mr Cheruiyot added that survey to confirm the size of the land was done three years later, in 2013, after the firm had occupied the land.
Asked to explain why the transfer was necessary, he said Hass was to supply the county with bitumen and fuel for burning asphalt at discounted market rates.
But then it was revealed that the company no longer supplies fuel to City Hall and has since turned use of the land from industrial to commercial.
“At first, the firm was to pay a ground rent of Sh650,000 annually based on industrial use but this changed to Sh1.2 million when the company changed use of the land to commercial,” said Mr Nyoike.
Taken to task to explain whether the lease agreement allowed development of the land, acting Urban Planning Chief Officer Jairus Musumba redirected the question to his junior.
Mr Musumba said a development plan was approved in 2013 but could not name the officer who signed the approval.
“It was done by the planning department. That lies with the lease department so I will let them deal with it,” he said.
This was after the committee asked questions on the ongoing construction of a wall on the property, which officers said would form part of a fuel storage depot.
Hass’ advocate Feisal Ibrahim was dismissed from the meeting for having no power of attorney to represent the firm as well as an appointment letter to show authority to represent the company.
Mr Ibrahim compounded matters when he said he had limited instructions from his client, Hass CEO Salat Mohammed, whom he said had travelled to Uganda.
Karen MCA David Mberia termed the lawyer a “stranger” and asked the committee chair Wilfred Odalo to compel a Hass proprietor to appear before the committee in person.
Makongeni MCA Peter Imwatok said, “You are here illegally as you are supposed to accompany your client, not come here alone. Are you ready to take an oath on behalf of your client? You have been playing games with the county.”
Mr Odalo directed the CEO and county officers to face the committee on February 11.
“Th Hass proprietor has failed to appear before us several times and has been playing this games with us. Should the proprietor fail to appear he shall be summoned,” said Mr Odalo.
Additional reporting by Mercy Wahito.
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