State on the brink of acquiring land for new railway at Sh10 billion

The Government had by last week disbursed about Sh3 billion for land it has acquired for construction of the Standard Gauge Railway (SGR).

Kenya Railways Corporation (KRC), the project’s implementing agency said it is currently making payments to people whose land has been acquired along the railway corridor.

KRC told Weekend Business that so far, it has paid Sh3 billion from Sh5.5 billion it has received from the National Treasury.

The Government expects to pay a total of Sh10 billion to the land owners affected by the railway.

Maxwell Mengich SGR project manager at KRC said the Government has nearly concluded negotiating with landowners for the purchase of land that will be used to build the multi-billion shilling Standard Gauge Railway.

He said KRC has already reached agreements to acquire 85 per cent of the land to construct the new railway between Mombasa and Nairobi. It expects to conclude acquisition of the remaining 15 per cent in the coming weeks.

“The compensation is being done in batches. We started paying the project affected persons between Mariakani to Mtito Andei and as of Wednesday this week we had paid out those between Mtito Andei and Kiboko,” said Mengich.

“A total of Sh3 billion has so far been dispatched.”

Railway levy

The funds being used to make the payments comes from the Railway Development Levy Fund, a kitty set up during the last financial year to help mobilise funds that will be used in the construction of the new railway. The levy charges a 1.5 per cent fee on all imports to Kenya.

“The negotiations for the 15 per cent of the land that has not been acquired will be concluded soon and it should be gazetted in the coming weeks,” said Eng Mengich. He spoke Wednesday at Mtito Andei during a tour of the SGR railway route.

He added that the government has met most of the conditions set for the release of the money from the EXIM Bank of China and the bank should soon release the money.

The Sh327 billion railway is 85 per cent financed by the Chinese bank through a concessional loan. The remainder of the finances will be met by the Government, mostly through the money collected through the railway development levy.

Mengich also said KRC expected the initial three kilometres of the new railway to be complete by end of January. “CRBC has already brought in assorted equipment... all the required machinery is in the country. The company is currently doing preparatory works before they start laying the railway. We expect that they should have the first three kilometres of complete railway by end of January,” he said.

Paul Ndonye a resident of Mtito Andei is among the project affected persons who got their payment last week. He said he received three million shilling for what he described as eight plots that were acquired.

He said he would use the money to resettle his family. “I am happy that I have got the payment. I am now looking for a new place to settle,” said Ndonye. Local leaders said they would organise for counseling of the affected persons on relocation and spending the money they have gotten from the sale of their land.