Tata Chemicals risks losing land over Sh17b debt

Kajiado Governor Joseph ole Lenku, addresses residents of Magadi ward during a tensed meeting on Saturday. Lenku threatened to subdivide land occupied by Tata Chemicals Company Limited. [Peterson Githaiga, Standard]

Kajiado Governor Joseph ole Lenku has threatened to subdivide land on which sits a mineral company he claims owes the county government Sh17 billion in land rates.

The county chief said Tata Chemicals Limited, formerly Magadi Soda, had accumulated the debt over six years on the 224,991 acres in Magadi ward.

"We are planning to have a big town here. I am today ordering the minister in charge of land to move in with his surveyors and start allocating plots to residents of Magadi so that they can also do business in this area. We are tired of these people," said a furious Lenku.

The governor accused the company management of taking advantage of the people of Kajiado by not paying land rates.

Mr Lenku said the firm owed the county Sh17 billion being defaulted payments since 2013, calculated at Sh14,000 per acre annually, as per the current Finance Act.

He said the arrears were negotiated downwards in February 2015 by then Governor David Nkedianye through a secret deal, an allegation disputed by the company's management.

The company's management said the rates were reviewed by Mr Nkedianye in 2015 following a gentleman’s agreement.

No document was signed during the review of the rates. However, minutes of the meeting between the management of the company and county officials indicate it was agreed that the rates be scaled down from Sh14,000 per acre to Sh120.

Lenku has dismissed the agreement, terming it a conspiracy to defraud residents.

“How can you negotiate to reduce tax from Sh14,000 per acre to Sh120? It is incomprehensible," he said in Magadi location.

“We cannot play games with taxes. No investor will be allowed (to transact) if they don’t fulfill their obligation with the government,” Lenku said yesterday.

Meanwhile, Tata Chemicals Ltd has promised to go to court to stop the county government from attaching its property over the arrears.

Company spokesperson Diana Irungu said company lawyers and those of the county government were set to take on each other in the matter that has a history of controversy dating back to 1980s.

Ms Irungu read "malice" in the county government's intention to impound the company's trains and coaches in Kajiado, shutting down and paralysing the company's trans-shipping facility in Kajiado town. She argued that the intention was to put unjustified and unlawful pressure on the company.