• KPC did not provide documents supporting the disposal of the land.
• MPs say the land would have fetched more than the Sh12 million it was bought at.
Image: BRIAN OTIENO
MPs are probing circumstances under which a 42-acre Kenya Pipeline Company land in Naivasha was sold to a private company, for a song.
In 2007, the agency’s top bosses sold the land, currently valued at Sh625 million, at only Sh7.9 million.
Auditor General Nancy Gathungu in her 2022 report on KPC books of accounts said the land was not disposed of correctly.
“The parcel measuring 42.10 acres valued at Sh625,000,000 is occupied by the encroachers who had erected permanent structures on the land,” the auditor said.
KPC did not provide documents supporting the disposal of the land, including approval from the company’s board of directors and the National Treasury.
Despite having sold the land in 2007, the title was transferred in September 2021, and KPC kept reporting it in its books as among its assets.
Following the query, MPs invited KPC bosses, led by managing director Joe Sang, to address the query.
Their central concern is that the land would have fetched more than the amount it was sold, regardless of the sale having happened 17 years ago.
The National Assembly’s Public Investment Committee on Commercial Affairs and Energy said since land appreciates, the value had gone up at the time it was sold - logically.
The committee, chaired by Pokot South MP David Pkosing, on Tuesday said it was not satisfied with the company’s response.
“There is a question that KPC needs to answer. Was it a game by directors to give themselves land through the private company,” committee chairman David Pkosing asked.
KPC revealed the land was sold to a company trading as Nakuru Express Suppliers and Services Ltd.
Trouble ensued after KPC attempted to deny that they were unable to get details of the previous directors of the private company who purchased the land.
Pkosing said, “The question we seek to find answers to include; was there value for money? Has the parcel been subdivided? Who was it subdivided to?”
The committee heard the land was sold for much lower price than the Sh12.7 million, which was its value in 1991 when KPC acquired it.
The company purchased the land in 1991 at Sh11 million for construction of pump station [PS24].
In response, Sang said the disposal was requested in 2006 by Finance ministry, which later granted the approval.
He said the board used valuers report to sell the portion under query to Nakuru Express Suppliers.
Among the top questions by the House team is why the company destroyed records of the sale process.
“Are there no records of the sale agreement? Are you saying you don't know the people who are buying this land? Are there no records to show who you were dealing with,” Kaloleni MP Paul Katana posed.
“Was the sale by tender? Who tendered? How was Nakuru Express Suppliers and Services Ltd picked?”
The committee questioned why the sale agreements have no names, just people signing.
“There was an intention to dispose, but what process did you follow for the disposal?” Pkosing asked.
KPC top guns at the meeting when pressed for the records said the company destroys unimportant documents every 10 years.
“We did the last bit last year. I am not sure if the documents were part of those that we destroyed,” said Nancy Rono, acting supply chain manager.
This ignited sharp reactions from MPs who questioned why KPC would dispose of documents that still have outstanding audit queries.
“There is no way they destroyed the records because the land was still valued by KPC as its land,” Aldai MP Marianne Kitany said.
The total acreage of the KPC land is 47 acres. KPC is occupying five acres.
The 47 acres has residential buildings, whose ownership is subject of the ongoing parliamentary probe.
“We want to know if there was any subdivision by the acquiring company. That way we will know these faceless beneficiaries,” Pkosing said.
“We all agree there is a question...the committee will make a decision on how the people of Kenya will get value for money.”
Wajir West MP Yusuf Farah said, “There are gaps in terms of explanation by the KPC and documents destroyed brings a lot of queries. Let them share the documents and we call the persons of interest.”
MPs also asked whether the government valuation was used in the purchase.
The committee said it would invite the Survey of Kenya and Nakuru Express Suppliers Ltd to shed light on the matter.