Portland Cement repels Chinese firm in row over murram for Nairobi Expressway

What you need to know:

EAPCC accuses the Chinese firm of mining murram and hardcore stones in two parcels of land in Mavoko without its permission and is threatening legal action.
The cash-strapped firm said it is yet to find a “suitable” buyer for 2,076 acres, which shareholders voted to sell at an extraordinary general meeting in September 2019 to rescue it from insolvency.
The EAPCC parcels of land are currently occupied by squatters.

East Africa Portland Cement Company (EAPCC) #ticker:PORT is locked in a standoff with China Road and Bridges Corporation (CRBC) over mining of building materials in the cement maker’s Mavoko land for the ongoing construction of Nairobi expressway.

EAPCC is accusing the Chinese firm of mining murram and hardcore stones in two parcels of land in Mavoko without its permission and is threatening legal action.

The loss-making cement firms reckons that the Chinese firm’s mining activity is undervaluing its properties at a time when it has stepped up the search for a buyer to snap-up part of its vast properties.

It is seeking at least Sh10 billion from the land sale to help it clear mounting debts owed to KCB Bank #ticker:KCB and suppliers, and unlock fresh funding to keep it afloat.

EAPCC acting managing director Stephen Nthei has asked CRBC or its agents and sub contractors to stop the mining.

"The said materials are currently being used to construct the ongoing expressway along Mombasa road off Jomo Kenyatta International Airport(JKIA)...EAPCC Plc is a government agency and cannot encourage unethical practice by contractors in the development of infrastructure," Mr Nthei said in letter seen by the Business Daily.

The cash-strapped firm said it is yet to find a “suitable” buyer for 2,076 acres, which shareholders voted to sell at an extraordinary general meeting in September 2019 to rescue it from insolvency after years of mismanagement amid a slowdown in property markets.

"We have written to the company twice to stop mining to no avail. The company cannot violate the country laws when constructing a commercial road. Any mining activities will devalue our land when we are eyeing prospective buyers. We might be forced to institute recovery proceedings against this company,” said Mr Nthei.

The Chinese firm is building the 27.1km double-decker road for Sh65 billion using its own cash and will recoup its investments from charging toll fees.

Dual carriageway

It will earn an estimated Sh106.8 billion profit for the 27 years it will own and operate the Nairobi expressway.

The expressway involves a four-lane and six-lane dual carriageway within the existing median of Mombasa Road/Uhuru Highway/Waiyaki Way and 11 interchanges or exits and entry routes that will act as toll ramps.

The EAPCC parcels of land are currently occupied by squatters.

"We woke up one day only to see Chinese bulldozers mining murram and hardcore stones in previous abandoned quarries. We are also opposed to any further mining,” said Nancy Ndunge, squatter.

There has been heightened mining in the two parcels of land over the past two months by CRBC or contractors using trucks bearing CRBC stickers.