Tata Chemicals closed over Sh10bn dispute with Kajiado County

A multi-billion investment at Lake Magadi has had its depot in Kajiado town closed in a long-standing dispute over defaulted payment of land rates owed to Kajiado County Government.

On Wednesday, a team comprising inspection, compliance and revenue officers raided Tata Chemicals Magadi Ltd and locked its main gate and the entry to the depot through the Magadi-Kajiado railway line.

Tens of trucks arriving at the facility were caught unawares as the depot remained closed. A passenger train that ferries hundreds of commuters from Magadi to Kajiado town managed to enter the depot in the afternoon before a reinforcement team arrived to beef up security at the railway line.

The latest drama at the depot is as a result of a fresh row between the investor and the County Government of Kajiado over arrears in land rates and trading licences amounting to billions of shillings.

The dispute between the two entities has been going on for the last five years. In 2019, Governor Joseph Ole Lenku stormed the main factory in Lake Magadi with more than 3,000 residents and forced its closure.

During the incident, members of the community ordered all the staff out of the company premises.

On Wednesday, the County's Finance CEC member, Alais Kisota, who was accompanied with senior revenue officers, said the company must pay the arrears or risk permanent closure.

"This is a blatant abuse of hospitality by the people of Kajiado. Small businesses are paying their rates and levies. How can an investor who is raking in billions in profits flatly refuse to pay its tax obligations to us?" posed Mr Kisota.

He added that the County Government had halted the issuance of licences and permits to the company until it pays up the arrears. 

"As far as we are concerned, Tata Chemicals are operating in Kajiado illegally. They have no licences and permits that are supposed to come from us," he said.

Last March, Tata Chemicals wrote to the County Government requesting for an extension of its 99 years lease which was due to expire.

But the devolved unit rejected the lease renewal request by the Lake Magadi-based company, a decision that signaled potential administrative crisis of the company.

The company occupies 224,991 acres of land in Magadi area, Kajiado West Sub county.

Governor Lenku, through a letter signed by County Secretary Francis Sakuda, said the lease renewal would not happen before the multinational cleared its rates arrears it owed the devolved unit.

"It is our position that you have not complied with terms and conditions of the existing lease. In the matter of Tata Chemicals Magadi Ltd vs County Government of Kajiado and two others, the county government’s right to charge rates was upheld and what is only in contention is the size of the rateable area," the letter seen by the Nation reads in part.

The dispute between Tata Chemicals and the County has been in and out of court with attempts for arbitration by the Ministry of Mining and Petroleum, as directed by the High Court in Kajiado, hitting a snag in 2021 after the investor boycotted the sittings.

However, Tata Chemicals, through its Managing Director, Subodh Srivastav, said it is actively engaged in discussions with the National Government to seek a mutually agreeable resolution to the dispute.

"We acknowledge the communication received from Regional Business Connection, acting on behalf of the County Government of Kajiado, and have promptly addressed it, emphasising the legal concerns surrounding their proposed actions,” the company said.