Taxpayers will have to foot a land compensation bill worth over Sh30 billion for the standard gauge railway (SGR) once the project is completed.
The National Land Commission (NLC) says that over 4, 600 hectares will be acquired for the new 609km Mombasa-Nairobi railway.
“The acreage of land gazette for the Standard Gauge Railway is 4,616 hectares with compensation amounting to Sh30.2 billion,” said Mohamed Swazuri.
The Commission delegated payment of land billions to Kenya Railways amid claims of flawed compensation.
A leaked Kenya Railway internal audit report revealed massive irregularities in compensation of both individuals and companies whose land the government acquired to pave the way for the new railway.
Landowners in the same locality and with different property sizes were offered equal compensation; building owners were overpaid for their structures and others paid for land that belonged to the government.
The SGR, which will complement the slower narrow gauge network that is operated by Rift Valley Railways, is expected to be ready by 2017 at a cost of Sh447.5 billion, including financing costs.
Kenya Railways is paying land owners from collections done through the Rail Development Levy, which was introduced in 2013 to help finance upgrade of the rail network. The levy charged at 1.5 per cent of imported goods and it raised more than Sh22 billion annually.
“They pay as they receive money periodically from the Rail Development Levy,” said Dr Swazuri. MPs have questioned the rationale for the NLC delegating its constitutional mandate to the KRC given that the Corporation is also a beneficiary lined up for compensation.