The move will derail State’s plans to build cheap homes under the Big 4 Agenda in a multi-billion property deal financed by Chinese and Qataris.
The suit followed opposition from the Central Organisation of Trade Unions (Cotu), which argued NSSF and Portland cement were not consulted and have no intentions to cede the land for free.
The Ministry of Land and Physical Planning wanted to acquire the land for free because EAPCC failed to use it for agricultural use in line with allocation terms inked in 1960.
High Court on Thursday stopped the State from acquiring 4,272 acres estimated at Sh6.4 billion, from East Africa Portland Cement Company (EAPCC) for free after it failed to consult the firm’s shareholder, National Social Security Fund (NSSF) and French firm Lafarge.
The move will derail State’s plans to build cheap homes under the Big 4 Agenda in a multi-billion property deal financed by Chinese and Qataris.
Justice Loice Komingoi stopped the takeover of the land in Athi River because the government failed to follow rules that guide compulsory acquisition including consulting stakeholders like the NSSF and the firms that is listed at the Nairobi bourse.
The suit followed opposition from the Central Organisation of Trade Unions (Cotu), which argued NSSF and Portland cement were not consulted and have no intentions to cede the land for free.
NSSF has a 27 percent stake in the firm with the government ownership standing at 22.3 percent with Lafarge controlling 41.7 percent stake.
The Ministry of Land and Physical Planning wanted to acquire the land for free because EAPCC failed to use it for agricultural use in line with allocation terms inked in 1960.
The company was required to surrender the land immediately, to clear way for private investors- including Chinese and Qataris — to build more than 3,000 affordable housing units.
In 2019, Kenya secured commitments from foreign investors to build the houses as part of the government’s Big 4 Agenda spearheaded by President Uhuru Kenyatta.
“A conservatory order maintaining the status quo and directing the Respondents jointly and or severally, their servants or other government or statutory bodies from interfering with the 2nd Interested Party (EAPCC) quiet possession and ownership of the property,” the judge said.
Cotu moved to court last year arguing that NSSF is the biggest shareholder at EAPCC and workers stand to lose their investment if the land is seized for the housing project.
He said Cotu in consultation with EAPCC and NSSF does not intend to sell the only asset at the moment, whether willful sale or compulsory acquisition.
The government identified the land as the available option for the project as well as industrial development and future development plans along Mombasa Road.
But Cotu lawyer Donald Kipkorir challenged the compulsory acquisition saying it was violating the company’s investments and economic rights by taking away its asset.
The court action followed a letter from the principal secretary in the Ministry of Land and Physical Planning on August 13, 2019, to EAPCC’s acting managing director, asking the cement maker to surrender the land.
Mr Kipkorir argued that the government should seek several approvals from all stakeholders in the acquisition of both private and public land. The lawyer submitted that the letter was high-handed subversion of the guidelines and principles of compulsory land acquisition.
“As key stakeholders with massive interest in EAPCC, NSSF keeps all the audited records of accounts on the financials of the company in terms of investments, made on behalf of Kenyans. The number of shares that NSSF holds at EAPCC as of June 2018 had an approximate value of more than Sh100 million,” he said.
Cotu said the deteriorating performance of EAPCC does not signify in any way that the company is not in business or it is not using the land for the intended use. He said the company has put forward a potential equity injection of Sh45 billion over the next five years.
“The company and stakeholders believe this will be fundamental in elevation of the company’s facilities such as the aging plant and machinery which has caused significant periods of downtime thus return EAPCC to a position of competitiveness in the market,” Mr Kipkorir said.
