Railways denies impropriety in sale of property

By LUKE ANAMI

Kenya Railways Corporation says the process of disposing off its assets will be above board.

Managing Director Nduva Muli said the process has been fair and the corporation will continue to ensure due process is followed.

He refuted claims the firm had awarded houses to powerful individuals in its programme to dispose off assets.

“Contrary to reports that we have disposed off our assets to politically correct individuals, the plan to dispose them off has been open and transparent and no one has been favoured including ministers or their relatives,” Muli said.

He added: “It is part of our strategy to sell off non-strategic properties including land. Renting and disposing is part of our business.”

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The sale of KRC properties including houses was triggered by a decision in 2006 to sell off non-strategic assets.

The then Finance Secretary Joseph Kinyua, now PS Treasury, gave KRC the nod to sell the property following a proposal by then Transport PS Gerishon Ikiara.

Some of the property was to be sold to employees while others to the rest of the public in an open and competitive process. He refuted claims KRC is in a rush to sell off its assets as a way of fundraising for elections.

“It is part of our core business to harness real estate potential. It is therefore part of our strategic plan to dispose off some of these assets right from 2006 and has nothing to do with the polls,” Muli added.

In the past three months, KRC advertised the sale of 10 acres in South B, raising concern as to why the corporation was disposing off land. Further, most of KRC’s land in Industrial Area is leased.

“The South B plot was open market tender and we have since sold it, achieving double our revenue reserves. In Westlands, we are developing a major office mall which we will sell and retain partly,” the MD said.

Muli added: “Before we dispose off any of our assets, we usually carry out a feasibility study. It informs us on the value of the property in question, determines the value in relation with its location and therefore enables us to determine market value and price.”

KRC is one of the largest owners of land in Kenya, with some of its property having been grabbed.

“The strategy about property needs to be understood. As you are aware, KRC is one of the largest owners of land. These tracts were allocated before independence. Unfortunately, grabbers have taken over our land in major towns,” he added. “But we are in the process of recovering the land.”

Following a concession of railway operations with Rift Valley Railways (RVR) in 2006, the corporation embarked on a process of implementing a new mandate.

Revised mandate

“Part of our revised mandate include managing the concession, management and development of non-conceded assets and the introduction of a Metropolitan Railway Network that will serve the city of Nairobi,” Muli said.

However, the giant corporation’s total assets have recorded decline over the years due to sustained increase in liabilities.

“At one stage, we had huge debts of over Sh19 billion in 2007. But through disposal of a number of houses and land, we have managed to reduce these debts to about a billion shillings,” Muli said.

“Before, KRC required Sh300 million per month from the Government but a look at our revenue trends indicate that since 2007, the corporation has not required exchequer funding to cover operational costs,” Muli said.

The official added 40 per cent of revenue is derived from sale of assets in the past four years.