Compensation row derails Devki plans to build cement factory in Kitui

Plans by the Devki Group, which runs National Cement Company, to set up a multi-billion-shilling cement factory in Mwingi, Kitui county, have been thrown into jeopardy following protests by a section of the community over unpaid compensation.

Residents of Ngaaie location, which is rich in limestone deposits, have threatened to hold demos and move to court to stop the company from starting any project in the area until they receive compensation for the land.

The dispute revolves around 19 claims touching on compensation for graves and other developments on acquired land.

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The Devki Group, which is owned by steel tycoon Narendra Raval, took over the Ngaaie piece of land that was initially owned by Athi River Mining Company (ARM) which it acquired in 2020 for Sh5 billion in 2020.

Consultancy firm PwC had been appointed as an administrator to oversee the winding up of ARM after it went into insolvency.

It was then expected that PWC would settle all the pending compensation claims to allow Devki Group to move in and start its project.

However, according to the residents, PwC has abdicated its obligation and has not shown any commitment to settle the 19 claims.

Further, the community says that PwC has declined an invitation for a joint meeting to resolve the impasse.

“We expected PwC to settle the pending compensation claims but they have been evasive,” Mwendwa Muatha, the chairman of Ngaaie liaison committee, told The Standard.

He said that when they raised the issue PwC sent a valuer to the ground in November, 2022, who allegedly did a shoddy work.

Mr Muatha claimed that in some instances, the valuer did valuation for houses but left out graves and other developments that were part of the compensation.

He insisted that PwC could not run away from its obligation.

“We expect them to pay. If they don’t pay, we shall mobilise the community and go to court. Meanwhile, we are staying put on the land and will not allow the investor to carry out any activities," he said.

Before ARM went into financial distress, it had acquired about 4000 acres in the limestone-rich area where the firm intended to set up a Sh26 billion factory.

The company compensated the locals for land but ran into financial headwinds before completing some of the payments for houses and graves that needed to be relocated to other places.

On April 29, 2024, Devki Group chairman Raval, wrote an email to PwC through George Weru who served as a joint administrator for ARM alongside Muniu Thoithi, reminding him that it was PwC’s “responsibility and obligation” to pay and finalise all the outstanding claims.

“It is my advice that you resolve that issue to allow for fencing of the land. It is the responsibility and obligation of PwC to pay the outstanding claims,” Raval said in the email, which was also copied to the company’s lawyer Moses Wachira.

When The Standard contacted Mr Weru on Monday, he said they would first seek to verify and validate the new claims.

He explained that ARM was in liquidation and did not have much resources for another round of compensation.

“These are new claims and you know the company is in liquidation, that is why we are urging the community to be patient," Weru said.

"However, we have to subject the claims to a new process of verification because we can only deal with valid claims," he added.

He did not say when the verification process would be done.

But in an email addressed to the community’s chairman on April 28, 2024, PwC lawyer Mr Wachira said all the compensation claims were conclusively dealt with in past verification exercises, saying that PwC was not in a position to engage in another verification process.

"The company is not aware of any land parcels that remain uncompensated. Considering that ARM Cement Plc is no longer trading, and is in fact in liquidation, the company does not have additional resources to fund a new verification exercise and compensation,” he said. 

Devki plans to establish a clinker factory with a capacity to produce 5500 tonnes of clinker per day. Clinker is the main raw material in cement manufacturing.

The move is projected to create jobs for locals and spur economic growth in the area.