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January 21, 2019

Railway transport in Kajiado paralysed as county impounds Tata locomotives over Sh17bn debt

A train passes through Magadi area in Kajiado county. /COURTESY
A train passes through Magadi area in Kajiado county. /COURTESY

Railway transport between Magadi and Konza was on Friday afternoon paralysed after county officials impounded Tata Chemicals' locomotives and cars.

Kajiado county government revenue officers stormed Tata Chemicals’ premises in Kajiado town and locked all gates demanding Sh17 billion owed in land rates.

Tata Chemicals Ltd’s corporate communications officer Diana Irungu told the Star lawyers from both sides were in talks after the county government blocked their premises.

In November last year, the county claimed the land rates debt in dates back to 2013.

It said the amount accrued from the company's 224,991 acres in Magadi, Kajiado West, where it extracts soda ash.

The county said Tata Chemicals, formerly known as Magadi Soda, owed the billions in arrears at the rate of Sh14,000 per acre.

The amount had been negotiated downwards in a "secret deal" in February 2015 in a bid to cushion the company from collapse over the arrears.

Documents seen by the Star show the deal sought to reduce the rates charged per acre from the Finance Act's Sh14, 000 to Sh120.

Read: Tata Chemicals Ltd faces auction over Sh17bn land debt

“The deal meant Tata Chemicals would remit to the county about Sh27 million every year, and not the Sh3.1 billion as per the current Finance Act,” director of revenue David Muntet said.

Governor Joseph Ole Lenku termed the deal an "act of fraud" against the people of Kajiado.

The county's directorate of revenue went after the defaulting corporate organisations, with Tata Chemicals being one of the leading defaulters.

According to the county revenue accounts, the company has been remitting cash as per the agreement.

The county has, however, been treating the remittances as part of the initial Sh17 billion and not Sh27 million as per the deal.

Muntet said, so far, slightly over Sh100 million has been remitted by Tata Chemicals.

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