Kenya Railway Corporation officers outside the Kencont Container Freight Station premises in Mombasa on May 18, 2025. The corporation claims the land was acquired illegally.
An audit has revealed massive grabbing of land belonging to the Kenya Railways Corporation, valued at billions of shillings.
The latest report by the Auditor General, Nancy Gathungu, for the year ending June 2024, has revealed that the Kenya Railways Corporation has lost control of 529 parcels of land to private individuals and government entities.
The Auditor-General has also put the Kenya Railways Corporation on the spot over mismanagement, uncollected rent and lack of a proper asset register.
In some cases, well-connected fraudsters grabbed KRC land and resold it to private developers.
Read: Land worth over Sh50 billion belonging to State firms grabbed, Auditor-General's report reveals
"Review of land records, revealed that 529 parcels of land have been illegally allocated across the country and they are yet to be recovered. Despite records showing that the Kenya Railways owned land valued at an excess of Sh17.9billion, as at June 2024, land valuation has also not been done over the years," reads part of the report.
The audit report has revealed illegal allocations of land valued at billions of shillings.
Irregularly allocated
In some instances, the parcels of land were allocated to third parties without the consent of the Kenya Railways Corporation.
In her report, Ms Gathungu revealed that land in Mombasa, Limuru, Nakuru, and Kisumu had either been grabbed or irregularly allocated, and most of it remains unrecovered despite the corporation putting in place measures to reclaim it.
In Mombasa, for instance, parcels adjacent to the railway station measuring between 0.75 and one acre were irregularly allocated to private individuals, who have since developed the land.
The report shows that the illegal allocations were made by authorities over the years, including the Commissioner of Lands or defunct local authorities, without Kenya Railways’ consent.
“Although management indicated that the leases were procedural, board approvals authorising the leases were not provided for audit. However, management has sought the intervention of the Ethics and Anti-Corruption Commission to repossess the parcels of land. The process is ongoing and has not been concluded as of June 30, 2024,” the report reads.
Nine industrial plots
In Limuru, several parcels within the railway station, including nine industrial plots measuring around three acres and land within Kikuyu Railway Station measuring two acres, were allocated to third parties.
These allocations were made without the corporation’s consent by the Commissioner of Lands or defunct local authorities. The report noted that efforts to recover these parcels have not borne fruit.
"The corporation has sought the intervention of various government agencies such as the Ethics and Anti-Corruption Commission, Ministry of Lands, National Land Commission and the Director of Survey to assist in the recovery of the irregularly allocated land. However, the land is yet to be recovered," says the report.
In Ziwani Estate, Nakuru City, land measuring about seven acres, belonging to the Kenya Railways, has been encroached on by the Nakuru County government, according to the report.
Structures demolished by the Kenya Railways Corporation along Geoffrey Kamau Way in Nakuru Town on October 11, 2020.
"The land had been allocated to private individuals by the Nakuru County government on a long-term lease of 25 years, and an amount of Sh37.5 million having been paid as premium and attracting an annual rent of Sh13.3 million," reads the report.
“Kenya Railways Corporation has not explained the steps being taken to revert the land to the tenants. Further, the Corporation continues to lose the opportunity to collect the annual rent of Sh13,300,002,” the report states.
In Kisumu County, the report highlights that 247 residential units owned by Kenya Railways have been taken over by various organisations, without lease agreements in place.
This has led to a rent loss of Sh27.4 million every year.
Land evaluation
Despite the corporation’s claims of ongoing recovery efforts, the audit indicates that most of the land remains in the hands of grabbers, and the lack of clear documentation has made the recovery process even more difficult.
A resident of Dagoretti estate, Nairobi, salvaging his property on October 1, 2020, after Kenya Railways demolished their houses.
Ms Gathungu criticised the Kenya Railways Corporation for not conducting proper land valuation and for failing to maintain an accurate and complete asset register.
"The register presented for audit was missing key details such as serial numbers, land reference numbers, locations, land category, ownership status, and certificate numbers," reads part of the report.
Additionally, she faulted the corporation for failing to tag assets as required by Section 4.11.2 of the Operations and Maintenance Policy on Asset and Liability Management in the Public Sector, which obligates accounting officers to implement an asset identification system as per National Treasury guidelines.
The audit report casts doubt on the reliability of the Sh17.95 billion land valuation listed under the Sh521.6 billion property, plant and equipment figure in the financial statements.
“In the circumstances, the accuracy and fair value of the land balance of Sh17,951,351,801 could not be confirmed,” the report states.
She further disclosed that the corporation has not paid Sh8.3 billion in compensation to individuals whose land was compulsorily acquired.
Structures demolished by the Kenya Railways Corporation along Geoffrey Kamau Way in Nakuru Town on October 11, 2020.
“Management did not explain why the balance has remained outstanding for a long period without being settled,” the report adds.
It also emerged that the Kenya Railways has attracted an avoidable expenditure of Sh34.1billion in the form of penalties amounting to Sh5.3billion and interests amounting to Sh28.8 billion, which could have otherwise been avoided.
The penalties are due to the non-settlement of a China Exim Bank loan.
