Hundreds of land parcels owned by the Kenya Ports Authority(KPA) and currently leased out to third parties are set for a special audit amid revenue leaks and fights with squatters and grabbers.
The ports manager presently has 200 lease deals for portions of its vast land inventory, mostly concentrated in the counties of Mombasa, Kilifi, Kwale, Nairobi, Busia and Nakuru.
The State agency, however, said that some of its land lease deals had proved problematic due to illegal alienation and occupancy.
“The leasing of land has recently invited several queries from the board (KPA Board of Directors) and various audit queries from the office of the Auditor General. It is for this reason that there is a need for an independent audit of the land leasing practices at KPA to better understand its implementation, reveal potential weaknesses, and inform the basis for improving the leasing function of the Authority,” KPA said.
“Currently KPA has in place about 200 leasing agreements conferring interests to third parties spread over different locations in Kenya. Hence the scope of the assignment will entail audit and documentation of all the lease agreements to ascertain whether the Authority derives value for money from these leases,” it added.
KPA netted Sh671.24 million from leased assets, including land in the 2019/20 financial year, which was the lowest in five years.
The State agency said it has particularly encountered an endemic challenge of squatter invasion or occupation and illegal alienation of its land parcels within Mombasa.
“Over time, the authority has developed various strategies to safeguard KPA land from the challenges, amongst them leasing out land that is not required for direct use by KPA,” the agency said.
This audit of the lease deals comes amid plans by the State to lease some of its key assets as part of an ambitious strategy to revitalise the maritime industry through public-private partnerships.
KPA Managing Director William Ruto in September invited bids from investors for the development and operation of port assets in Lamu and Mombasa through PPP. The assets include Lamu's container terminal berth 1-3, Lamu Special Economic Zone, Mombasa Port’s berth 11-14, and Mombasa Port container terminal 1.
The State had initially opposed a similar plan that had been mooted by the previous administration amid claims that post assets had been secretly sold to Dubai Port World FZE.
The tender call came months after the Kenya Development Corporation (KDC), a development finance institution, disclosed the Kenya Kwanza administration was scouting for private players to run sections of Kilindini Harbour, Dongo Kundu Port, Lamu Port, Kisumu Port, and Shimoni Fisheries port in an ambitious Sh1.4 trillion plan that is aimed at making the northern corridor competitive.
“The ports are confronted with the challenge of congestion and, therefore, higher dwell times for cargo. The ports will be leased/concessioned to private operators with landlord-type port management system,” states the KDC in its pitch to potential investors.
