Twists and turns in Sh2b city land saga

The collapse of a bank three decades ago kicked off a chain of reactions and errors by State officials that are now behind one of the biggest land ownership mysteries in Kenya today.

As Parliament investigates whether the Government paid more than Sh2 billion for a piece of land in Ruaraka that it allegedly owns, a trove of documents dating back to 1984 raises more questions over who the owner of the land along Thika Road really is.

It is not known who has in their possession the title of the land which is claimed by the Government and two private companies as the bank which financed development of houses for the GSU on it collapsed in 1987. Its owner died in 2004.

Documents seen by Sunday Standard confirm that the Kenya Urban Roads Authority (Kura) indeed paid to acquire part of the land for expansion of Outer Ring Road when it had already been paid for by the General Service Unit (GSU).

“We are in the process of finalising payments to the owner and would be obliged if you carry out a survey to ascertain that the land the government is paying for is 38 acres,” the State, through lawyer Waigi Kamau, told the Director of Survey on October 7, 2015.

“Our request has been necessitated by the fact that Kura has acquired and paid for a portion of the land for the purpose of expansion of Outer Ring Road,” she said.

As a result, the government may have paid twice for acquisition of land which could actually be its own in the saga that has dragged on for 37 years.

Irregular allotment

Two weeks ago, Lands Cabinet Secretary Faridah Karoney threw more fuel to the mystery when she faulted her colleague Fred Matiangi’s and National Land Commission (NLC) Chairman Muhammad Swazuri’s decision to approve a payment made as compensation for two schools that stand on the land.

On March 17 last year, Matiangi, then Education CS, authorised the NLC to acquire the 13.5-acre land -- LR No. 7879/4 -- in Ruaraka for the two schools — Ruaraka High School and Drive-In Primary School.

The acquisition included paying Sh3.3 billion to Afrison Exports and Imports Ltd and Huelands Ltd — two companies owned by businessman Francis Mburu — which claim ownership of the land.

From Karoney’s claims in Parliament, it is now unclear whether Ruaraka High School and Drive-In Primary School acquired the parcels of land they sit on. Karoney told Parliament that the allotment letter issued to the school 34 years ago was irregular.

Also on the spot is former Attorney General Githu Muigai who advised the Ministry of Lands to start processing payment for the land without consideration of the existing drama at that time.

“We note that both Ruaraka High School and Drive-In Estate School are public schools. Accordingly, it is our legal advisory that the constitutional requirement of both public purpose and interest as a factor in compulsory acquisition of private land is fulfilled,” wrote the former Attorney General to the Ministry of Education on June 7 last year.

The big question is how the saga over the ownership of the land has dragged on for all these years. A Hansard record from Parliament shows the matter was discussed on the floor of the House seven years ago when MPs questioned why the government was paying land rates if the property was private.

“Mr Speaker, the issue is that the government has been paying rates for land it is not occupying. The entire parcel is 86 acres. What you are occupying is 7.5 acres where there are maisonettes but you have been paying rates for the entire plot,” Charles Kilonzo, the Yatta MP asked in 2011.

Why would a government pay rates for land it does not own?

With the high stakes involved, wheeler-dealers who are thought to be behind the intrigues surrounding the property continue to milk money from everyone believed to be an interested party. Waiting on the sidelines are land vultures looking for loopholes to claim the land.

In 1984, Mburu, who owned Drive-In Estate Developers, had applied to the Ministry of Lands to be allowed to construct a secondary school on the parcel which was being subdivided.

Open spaces

Also on his plans submitted to the government was a shopping centre and 196 maisonettes. The maisonettes were approved, but the government said there was no need to construct a private secondary school since there was enough land for the construction of a school.

“After careful study on the subdivision plans you submitted to this office, it was noted that the open spaces are more than adequate and there is enough land left for other public purposes such as a primary school and nursery school,” wrote A F Mwangi for the Commissioner of Lands on December 18, 1984.

“Therefore there is no condition that compels you to have a secondary school site included in the sub-division scheme,” he said.

Mburu’s two other companies, Afrison and Huelands, claim to have bought the piece of land three years earlier in 1981 from Joreth Company. The two then transferred ownership to a third company, Whispering Palm Estate Ltd, also owned by Mburu and his two brothers Mark and Justin Mburu.

However, an agreement drawn on November 30, 1982 by Bhailal Patel and Patel Advocates has no mention of Joreth Company. Instead, Afrison Export Import Ltd acquired the disputed land from Edward Whittaker, a British national who had co-owned it with a Harold Whittaker (deceased).

After acquiring the land, Mburu approached Continental Bank of Kenya, the first African owned lender run by Philip Wahome, for a housing project loan. Meanwhile, the businessman through Drive-In Estate Developers Ltd wrote to the defunct Nairobi City Commission pulling off the conditional approval for the sub-division of the land.

Interestingly, Mburu, in that letter sent on December 19, 1984 said they were not the owners of the land but were merely contractors. Why Mburu would tell the Nairobi City Commission that he did not own the land is unclear, but it is one of the reasons why there is a dispute.

“Reference is made to your letter Ref CPD/0644/7879/4 dated March 28, 1984 on the matter which should have been addressed to the owners of the property as we are just contractors of the project,” he said. “We have been instructed by the registered land owners that they are not interested in your conditional approval. The owners have cancelled the entire application of sub-division of the land. They have been informed that your intention is to allocate the open spaces to individuals after the surrender,” he said.

Even more puzzling is that the Ministry of Lands, while vouching for the construction of the school by Drive-In Estate Developers, also gave the impression that they were interested parties in the land but had backed down.

“The director of the firm submitted to this office some impressive building plans for the site. These plans must have cost the company great amount of money,” DM Ndungu, on behalf of the PS, wrote to the Commissioner of Lands.

“This ministry has therefore relinquished any interest on the plot and would appreciate if Drive-In Estate Developers would go ahead with the proposed development,” said the ministry.

The Continental Bank of Kenya, which was to finance the projects, collapsed in 1987 forcing the Kenya Posts and Telecommunications Company (KPTC) to come to the aid of Drive-In Estate’s Ltd. The GSU then acquired the houses from KPTC after it went under, forcing Afrison and Huelands to go to court.

Delayed payment

After losing the 2012 case, the government negotiated Afrison and Huelands’ award to Sh2.4 billion. The National Treasury has, however, delayed paying the sum, and only released two installments of Sh600 million and Sh400 million in January and July respectively.

Mburu then went silent only to re-emerge on February 7, 2017 asking about the state of the subdivision of land which his other company had halted in 1984.

“Following your letter dated March 28, 1984 addressed to Drive-In Estate Ltd, the contractors of the project then and their subsequent reply letter requesting for the cancellation of the proposed subdivision, kindly inform us on the position of the development application,” he wrote to the City Planning Department.

It is this letter that re-awakened the drama over the ownership of the land that is now on its 35th year.

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