The land problem of Sakaja’s PPPs

Court has frozen a multibillion loan deal for the Pangani Urban Renewal Project after it barred Nairobi County from providing a private developer with the land title deed to use as collateral.

A little known petitioner Sheria na Watu has obtained orders from the Environment and Land Court stopping Nairobi Governor Johnston Sakaja from implementing the transfer contesting how the county got approvals for such a deal.

Members of the county assembly have raised concerns that the motion that gave the county a go ahead was rushed through the house without providing crucial documents from the central government, and terms of its joint venture deal with the developer.

The Pangani Housing Project is an initiative by the Nairobi City County Government in partnership with Tecnofin Kenya Limited, a company owned by among others the Sovereign Group linked to the family of late president Daniel Moi and his political allies.

The project to renew and re-create Pangani Estate by way of providing dignified and affordable homes for residents of Nairobi is supposed to occupy 12.5 acres in Pangani valued at Kes4 billion in 2019, to build 14 storey buildings.

The current value of the land and the size of the loan it was supposed to obtain is still unclear although the court order has been copied to eight lenders including KCB Group, I&M, Cooperative Bank, Standard Chartered, Equity, Family, Absa and NCBA which could indicate the possible lenders under the deal.

Read also: Shelter Afrique urges Africa to seek partnerships in fixing housing shortage

Kileleshwa MCA Robert Alai in a statement claimed the developer sought to take over the county property to hedge currency risks.

Mr Alai opposed the deal stating that the county should not start dishing out property to private developers before first auditing and accounting for all property under a legal asset register.

He said the motion had opened the floodgates for bleeding Nairobi assets through private deals modeled on the Pangani Urban Renewal process.

“While this might look OK to some, my gut instinct and general feeling of the spirit of the laws of Kenya clearly tells me that the Nairobi City County Assembly just gave a developer a title deed to secure themselves against financial obligations arising from their undertaking. The developer allegedly blamed “weak shilling” for the need to secure his company using the Nairobi City County assets,” Mr Alai said.

The court case may come into the face of Governor Sakaja’s latest announcement to build a convention center in the middle of the city to rival Kigali, complete with hotels and malls through a private sector deal.

While appearing on Citizen TV Governor Sakaja called Nairobi Green Park, “the most prime piece of land in East Africa (5 acres in the CBD)” indicating perhaps the county intends to leverage the property in the PPP deal.

He said the County has already made approvals for a new exit from the Nairobi Expressway that will terminate at the location giving it strategic access from the airport that would guarantee investors competitive advantage.

The city lacks an ultra-modern conference facility relying on the Kenyatta International Convention Centre, and Sarit Centre and Oshwal further off the central business district.

“Picture this, you land in Nairobi from abroad and in five minutes, you exit the expressway into the centre. There is a mall and other facilities. That is something we’re exploring to do under Public-Private Partnerships (PPP). People have expressed interest to build hotels in the conference facility,” Governor Sakaja sold his dream.

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