Estates will be sold to the government to boost the cash flow of the Kenya Railways pension scheme.
Muthurwa and Makongeni estates in Nairobi will be sold to the government to boost the cash flow of the Kenya Railways pension scheme, which owns the two properties.
The government will use the Muthurwa land for the expansion of Jogoo Road and Makongeni's 139 acres for the building of affordable homes under President Uhuru Kenyatta’s Big Four agenda.
The Kenya Railway Staff Retirement Benefits Scheme (KRSRBS) was established in 2006 to manage pensions for workers who had exited the rail firm. But it has been unable to make prompt pension payments due to poor cash flow, prompting the property sale to plug a Sh500 million funding deficit.
Treasury Chief Administrative Secretary (CAS) Nelson Gaichuhie told the National Assembly Committee on Finance and Planning yesterday that a memo has been drafted and presented to the Cabinet Secretary for Transport and Infrastructure, James Macharia, for onward transmission to the Cabinet for consideration and approval.
Muthurwa and Makongeni are among the 23 residential and commercial assets worth Sh12 billion that were transferred to the scheme to generate funds for the pensioners.
“The scheme relies on assets that are dilapidated and illiquid and it is experiencing challenges in paying pension,” Mr Gaichuhie said in response to a question by Naivasha MP Jayne Kihara.
The MP had sought a statement from the Treasury explaining the delay in paying the pensions, subjecting most beneficiaries to miserable lives retirement.
Mr Gaichuhie cited default in rent payment, legal suits against some of the assets and the dilapidated nature of most assets as the scheme's challenges, among others.
The scheme's monthly pension liability has risen from Sh25 million in 2006 to Sh70 million today, against only Sh45 million generated in the same period.
Mr Gaichuhie identified the 42-acre Ngara estate as the only one without encumbrances and therefore easy to dispose of.
The ownership of some of the properties is contested in court while the eight of the assets are not registered and therefore cannot be sold.
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