Kenya Pipeline Company land in Nakuru valued at Sh625 million has been encroached, a report of Auditor General Nancy Gathungu for the year ended June 30, 2021 shows.
Gathungu said the entire piece of land is valued at Sh700 million and measures 47.1 acres.
In her report, the Auditor General said 42.1 acres had illegally encroached, and permanent structures put up.
“Only five acres valued at Sh75 million was occupied by the company with the rest parcel measuring 42.1 acres valued at Sh625 million being occupied by encroachers,” she said.
“As a result, the ownership of the parcel which has been illegally encroached is threatened.”
Kenya Pipeline Company is a state corporation that has the responsibility of transporting, storing and delivering petroleum products to the consumers of Kenya through its pipeline system and oil depot network.
In her report, the Auditor General said the corporation made a loss on leased facilities.
Gathungu said the corporation made lease payments amounting to Sh1.2 billion to Kenya Petroleum Refineries Limited for use of the pipeline network, storage tanks and associated infrastructure.
“A comparison of total lease costs against total lease income for the year revealed that the company realised income amounting to Sh644.2 million thereby resulting in a net loss on the lease of Sh565 million,” she said.
The report noted that the lease agreement revealed that the payments were based on expenses incurred by Kenya Petroleum Refineries Limited.
It said the corporation was therefore not able to institute measures to minimise the costs to realise profits.
