The East African Portland Cement (EAPC) has been preparing to kick out encroachers from its land in Athi River, Machakos county, and had set aside close to half a billion shillings in readiness for the exercise over the past two years.
This, is even as it pondered the possibility of selling the thousands of acres, which were invaded by squatters and gullible Kenyans duped into buying the public land.
In its books, the company recognised a Sh425,870,000 fund in 2021/22 financial year as an amount that would be utilised for eviction of informal settlers sitting on its land, an indication that only a case before the Machakos High Court stood on its way to evicting the hundreds of people, who either encroached or were conned into buying the land. The company had set aside a similar amount in 2020/21 financial year.
Following the High Court decision that delivered a win to the cement manufacturer on Friday last week, Kenyans who had purchased plots on part of the company’s land and put up residential and commercial buildings woke up to a well-planned demolition exercise that left dozens of buildings flattened, and many families counting losses in the millions of shillings.
Over 100 structures built on Portland Cement land in Mavoko destroyed
While to the victims of the demolition exercise, this may have been as a result of the court decision only, to the company, the plan was laid down several years ago, since a look at the company’s documents and previous audit reports shows that the exercise had been in the works for the past several years and the demolition was a matter of when, not if.
“The company’s investment property under LR No. 8784/4 which has since been subdivided into four parcels of land is almost 70 per cent invaded by informal settlers while another parcel of land under LR No. 10424 is also partially occupied by informal settlers.
“However, the company continued to pursue several avenues to reclaim the occupied properties where an estimated cost of evicting the informal settlers amounting to Sh425,870,000 has been adjusted in the financial statements in arriving at the fair value of investment properties,” the Auditor-General noted in a report on the company for 2021/22 financial year, as the office queried “Land invaded by informal settlers.” The company, in its 2021/22 annual report, also recognised the Sh425.87 million eviction cost as part of the “haircut” considered in arriving at the fair value of its land parcels.
On Tuesday as the demolitions went on, EAPC board chairman Richard Mbithi acknowledged the company had long set aside a budget for the exercise.
A demolished house that had been built on Portland Cement land in Mavoko, Machakos County, on October 17, 2023.
Photo credit: File | Nation Media Group
“Yes, it is the company that is facilitating the ongoing demolitions and we had set a budget for that exercise,” he said.
But asked how much the budget was, the chairman said they would share the information soon.
As a Group, the EAPC owns 26 pieces of leasehold land totaling 6,366 acres under long-term lease arrangements, after its LR 10424 land was subdivided into 21 parcels.
Homes on Portland Cement land demolished after Ruto directive on land grabbers
Average price of the land per acre according to the EAPC stood at Sh5.2 million by last year, though the Auditor-General notes the land had a ‘carrying value’ of Sh5,475,190 per acre, as per the latest valuation last year.
“The fair value of the investment property is based on the valuation carried out by Regent Valuers International (K) Limited, independent valuers, on the basis of open market value (Level 3) as adjusted for the haircut. Included in the haircut is the eviction cost of Sh425,870,000 as at 30th June 2022 (2021: Sh425,870,000),” the company stated in its 2021/22 annual report.
Former EAPC Chairman Edwin Kinyua had also indicated the possibility that the company would offer the encroached land for sale to squatters sitting on it as an alternative revenue-raising measure.
“Sourcing for funds for plant modernisation has been initiated through disposal of idle land especially to the squatters that had encroached the land. The board aims to see this process completed successfully,” Mr Kinyua said in the company’s 2021/22 annual report.
A woman wails uncontrollably as her house in East African Portland in Mavoko was being demolished.
Photo credit: Stanley Ngotho | Nation Media Group
Invasion on the EAPC’s land started about a decade ago when the company ceased mining operations, with a land estimated at close to 4,300 acres being in dispute. Since then, there have been efforts, even legal and out of court battles about the land, that culminated in the Friday last week court ruling.
The company has in the past been rocked with several land-related disputes and scandals and in the latest events that have seen scores of buildings owned by people who were duped into purchasing plots in its land demolished. Among persons the Directorate of Criminal Investigations (DCI) is investigating is an MP, former police bosses in the area and officials of a society dealing in land issues.
But other than the invasion of its land, the company- which has been using sale of land as a revenue-raising measure for years- has also been accused of disposing of the public land at prices lower than the market value without justification.
The Auditor-General noted that last year it entered into a deal to sell 100 acres of its land in Athi River to a buyer at a cost of Sh4.5 million per acre as opposed to the market value of Sh5.475 million per acre, in the process losing Sh97.5 million.
“The company revalued the investment properties to a carrying value of Sh5,475,190 per acre. The renegotiated price of Sh4.5 million per acre resulted in an impairment loss of Sh97,519,000,” noted the Auditor-General.
