Stop SGR until land owners are paid, court rules

Construction of the Sh327 billion standard gauge railway on a parcel of land in Mombasa will remain suspended as losses continue to mount, the Environment and Land Court has ruled.

Lady Justice Ann Omollo said the construction of the SGR will only continue after Sh995,400,462, which was awarded to African Gas Oil Company Ltd and Miritni Free Port Ltd as compensation, is deposited in a joint escrow interest-earning account.

She directed the account to be opened in the joint names of lawyers for the two companies and those of Kenya Railways Corporation and thr National Land Commission within the next 21 days.

Kenya Railways says it’s losing Sh37.9 million daily since the construction was suspended by the court on June 24, putting the loss at nearly Sh1 billion now based on the lawyers’ estimates.

The loss is attributed to workers’ pay, expenses for running sites and for contracted supplies. The construction of the SGR is one of President Uhuru Kenyatta’s administration flagship projects.

Lady Justice Omollo further said upon compliance of the orders, the respondents will be free to proceed with the construction work.

“Should there be a default in order one (depositing money), there shall remain conservatory orders pending the hearing and determination of the petition,” said the judge.

Through lawyer Michael Oloo, African Gas and Oil Company Ltd and Miritini Free Port Ltd sought to have the construction halted pending hearing and determination of the petitions.

Mr Oloo said since the awards for compensation were issued, his clients have written several letters to the respondents without getting a response.

African Gas Oil Company stopped the rail construction on the strength that it’s yet to receive Sh519 million awarded to it by the National Land Commission as compensation for ceding the land for the mega project. But transfer of the funds were stopped after African Gas Oil ownership of the land was questioned.

Mr Oloo argued that prior to the acquisition of the land by the government, African Gas Oil wanted to put a container freight terminal and that there was no reason the government has refused to pay compensation money.