He said the dispute was brought to the attention of the government, including President William Ruto , who tasked the elected leaders to come up with a resolution.
Raila criticized the Kwanza administration over ongoing forceful evictions and demolition of settlements as the preferred way of acquiring or settling land disputes across the country.
"From Mavoko to Kakamega, Thika, and Mombasa and today in Voi, the government seems to be pursuing a policy of evicting people from their settlements using utmost pain inflicted at the most desperate moments," he said.
The dispute over the 54.26 hectares of land, lying along the Standard Gauge Railway line at Msambweni village in Voi, pits squatters and a private firm, Sparkle Properties Limited.
The squatters claim they have been living on the disputed land since 1938 before the investor was allocated the parcel. However, the private investor has documents to prove ownership of the property.
Yesterday, the bulldozers arrived in the area as early as 7.30 am and descended on the buildings amid tight security.
Some of the affected residents said they had not been served with court order.
At the scene, desperate squatters were removing their belongings from the demolished houses.
Governor Andrew Mwadime, Voi MP Abdi Chome, and Kaloleni MCA Azhar Din arrived at the scene but watched helplessly as the bulldozers brought down the buildings.
The governor was seen making frantic calls in a bid to address the situation.
The eviction comes barely two months after Governor Mwadime and local MPs met the Interior Principal Secretary Raymond Omollo to implore the government to intervene.
According to those who attended the meeting in November, the PS advised the county leadership to negotiate with the landowner to find a lasting solution to the problem.
In October last year, Chome also requested President Ruto to come to the rescue of the squatters who have been living on the disputed land for years.
Sparkle Properties Limited, a Mombasa firm, won the case filed by the squatters and issued a notice of eviction in October last year. The squatters vowed to remain put despite eviction threats.
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An earlier attempt by the investor to develop the plot was resisted by the hostile squatters claiming the company was a stranger to them.
However, the squatters were living in fear of eviction after the investor won a suit in the Mombasa High Court on October 21, last year.
The court ordered the squatters to pull down the houses and vacate the disputed land. They were at the same time ordered to pay general trespass damages amounting to over Sh1 million.
In the petition to the county assembly, the squatters said that if the court orders were to be executed, then they would be rendered homeless and lose ancestral land that they have occupied since 1938.
One of the squatters, Alfred Mwaengo Mnjama, said the controversial land initially belonged to a shoe-making company before it was transferred to the new investor.
He revealed that in 1978, elders accepted a request by the Bata Company to put up a shoe factory on the land to create employment for the locals.
Mnjama claimed that the company later proceeded to acquire a 99 lease granted by the Ministry of Lands in January 1979 but with terms and conditions as agreed with the elders.
He further revealed the condition was that the land and the building to be put up shall only be used for the Bata Shoe factory and the land should not be subdivided.
"We agreed with the former company that the land shall not be sold, transferred, or sublet. For over 31 years the company did not put up any project but instead sold the land to another investor in 2011 to purportedly construct a shopping mall in total disregard of the terms and condition of the grant," stated Mnjama who signed the petition.