The value of land in Maai Mahiu has dropped by nearly 30 per cent since the announcement that port services at the Naivasha Inland Container Depot (ICD) will revert back to the coastal town of Mombasa
This brings to an end an asset bubble that saw land owners selling the asset to “overzealous” speculators after the extension of the Standard Gauge Railway line was mooted.
Waiting for an anticipated windfall, wheeler-dealers engaged in hysterical purchases waiting to cash in on business opportunities that would arise from the obvious mega projects.
The second phase of Kenya's new railway line, running 120 kilometres from the capital Nairobi to Naivasha town, cost Sh150 billion ($1.5 billion). The line ends at the famous Naivasha ICD.
“The deals were too good to resist. Who would not want to have a piece of the cake…the tripling of the land prices was the icing on the cake and it told the story," said former chamber of commerce boss Njuguna Kamau.
When being sworn in, President William Ruto announced the reverting of port services to the coastal town of Mombasa.
He said: “This afternoon, I will be issuing instructions for clearing of all goods and other attendant operational issues to revert to the port of Mombasa. This will restore thousands of jobs in the city of Mombasa.”
With that presidential decree, the economic matrix of the area is changing rapidly, with the high-spirited speculators getting edgy, some are involved in panic selling of the prime property they acquired then.
A land surveyor and businessman David Chege laid bare the panic sales; alluding to the fact that buyers are trooping to his office, wanting to dispose of their parcels of land.
“I have a group of 25 who pooled resources together and purchased equal acreage at a cost of Sh2.5 million each. They were waiting to subdivide it,” he told the Nation.
"Mark you, some of them (buyers) secured loans which they are now unable to pay, hoping to cash on improved business opportunities due to the project. I have witnessed desperation," he said.
Mr Chege said since the presidential pronouncement, the value of land had dipped by almost 30 per cent, sending shockwaves among the speculators who, a few months ago, were bubbling with optimism.
“Cleary they are a frustrated lot and it shows. They are asking me to dispose of the entire acreage but to whom?” he posed
The matters have been complicated by the fact that Maai Mahiu is not an agricultural area, with the main economic activity being the sale of sand.
“We expect the price of land to depreciate further given the dynamics of the supply and demand curve, things are not looking rosy,” concluded the land surveyor.
He, however, talked of a silver lining, saying the construction of the Industrial Park will mitigate the loss of the port services, adding that setting up of Special Economic Activities is “huge.”
The Maai Mahiu-based surveyor encouraged the investors to exercise restraint, exuding confidence that the Industrial Park will also be a game-changer given that several industrialists have shown interest in putting factories in the area.
“Personally, the Industrial Park will be the game changer…the apparel factory will have employees which will in turn lead to the mushrooming of residential houses in the area, an opportunity for those who are patient still abounds,” added Mr Chege.
President Ruto was also upbeat about the fortunes of Naivasha and by extension Maai Mahiu as he promised the setting up of a leather factory, confident enough that it will spur growth within the economic setup.
“Before the current developments activities in Maai Mahiu, the area was a ghost town with minimal economic activities,” said another villager, Moses Sayagie
Just like Mr Chege, the villager too talked of cosy times soon after the mooting of the mega project, in his own estimation, the prices of land had tripled.
“After the completion of the mega projects, the ripple effect could be felt, with visitors wanting to catch a glimpse of the developed activities and enjoyed “nyama choma” which is a popular delicacy in this area,” said Mr Sayagie.
The resident hinted at holding demonstrations following the scaling down of activities in the far flung trading centre.
He questioned the move to relocate key port services terming it “a drastic action”.
Another Maa Mahiu resident Joseph Mutahi too said the relocating of port services was a deathblow to some of the beneficiaries.
“We had some of the locals who had secured jobs, including guards. They have been rendered jobless. It is quite unfortunate,” he pointed out. Mr Mutahi said the locals were positive of the fortunes brought by the dry port in the area, which was largely unknown hitherto to the setting up of the SGR project and the ICD.
“We cannot bury our heads in the sand just like the proverbial ostrich…the negative economic impact cannot be wished away,” he acknowledged.
He called on President Ruto’s administration to find a way of addressing the issue, instead of the move to relocate the port services.
Days before he exited office, President Uhuru Kenyatta said bringing developing activities to the grassroots level was the surest way of ensuring equitable growth across the country.
But some of the youths said the port had little benefit to them, arguing they were not aware of the kind of services offered at the port.
“The (dry port) operated like a closed shop and some of us despite having the requisite qualifications were never given job opportunities,” he claimed.
On July 27, Mr Kenyatta officially opened the 45,000 square metres Naivasha Inland Container Depot (Naivasha ICD).
The dry port was developed to ease cargo haulage and handling by reducing congestion at Mombasa Port, Nairobi ICD and on the roads, and has an installed capacity of 2 million tonnes per annum.
As part of the 450,000 TEUs per annum facility's inauguration, he witnessed the transfer of cargo containers headed to Western Kenya from the SGR to MGR using a Rail Mounted Gantry Crane (RMGC).